FX.co ★ Gold: upside continuation seems activated

The price of gold extended its growth as expected and now is trading at 1,935 at the time of writing. It has climbed as much as 1,938 today, registering a new higher high. The rate ignored the near-term resistance levels, but we still need strong confirmation before taking action.

Fundamentally, the UK Claimant Count Change represented a high-impact event as was reported at 25.7K versus 20.5K expected, Average Earnings Index reported a 6.9% growth beating the 6.8% growth estimated, while Unemployment Rate increased unexpectedly to 4.0% from 3.8%.

Furthermore, the Eurozone and German ZEW Economic Sentiment indicators came in worse than expected. XAU/USD edged higher but it remains to see how it reacts tomorrow after the RBNZ, BOC, and most important after the US inflation data.

XAU/USD Confirm Its Breakout!

As you can see on the H1 chart, the rate jumped and closed above 1,934 and above the median line (ml). Now, it challenges the broken levels. It could try to test and retest the broken levels before extending its growth.

Technically, a new false breakout above the broken levels and coming back below 1,931 may announce a new sell-off.

XAU/USD Forecast!

Staying above the 1,931 - 1,934 zone (above the median line) and making a new higher high, a bullish closure above 1,938 activates further growth and is seen as a buying signal.