Early in the European session, Gold (XAU/USD) is trading around 1,791.37 showing signs of exhaustion. We can see a technical correction after the asset printed a high of 1,806 on Friday.
In the next few hours, gold is expected to continue making a technical correction and could reach +1/8 Murray located at 1,781 and even the 200 EMA located at 1,761.
The eagle indicator is giving a negative signal since November 29. Gold is likely to continue a technical correction which could lead the price to support levels around 8/8 Murray located at 1,750 in the next few days.
US inflation data and interest rate announcements due this week will help investors decide whether the price of gold will be able to extend its Santa Claus rally until the end of the year. The signs of easing inflation in the US (with annual CPI below 7.7%) could encourage the recovery of gold. The price could overcome the strong resistance of 1,812 (+2/8 Murray) with prospects of reaching levels of 1,850.
On Tuesday, inflation data for November will be released. In annual terms, the Consumer Price Index (CPI) is expected to remain unchanged at 7.7%. A higher-than-expected figure could favor the strength of the US dollar, thus putting pressure on gold, which could fall to the levels of 1,750 and even 1,720.
Our trading plan for the next few hours is to sell gold below 1,795, with targets at 1,781 (+1/8 Murray) and 1,768. A technical rebound could occur around SMA 21, which will be a clear sign to sell below resistance of 1,781. Eventually, gold could reach 8/8 Murray at $1,750.