FX.co ★ Gold: amazing rally on poor US data

The price of gold edged higher as the USD depreciated. You knew from my previous analysis that XAU/USD could approach and reach new highs as the bias is still bullish. It's trading at 1,982 at the time of writing and it could hit new highs after taking out the immediate resistance levels.

Fundamentally, the Canadian CPI reported only a 0.1% growth versus the 0.3% growth expected, while the US Retail Sales and Core Retail Sales came in worse than expected, that's why the XAU/USD rallied. In addition, Industrial Production and Capacity Utilization Rate disappointed as well.

XAU/USD Targeting New Highs!

Technically, XAU/USD registered an aggressive breakout through the 1,967 static resistance, upper median line (uml), and above the weekly R1 (1,975). Its failure to retest the median line (ml) announced strong buyers.

After its amazing growth, we cannot exclude a temporary drop. The rate could come back to test and retest the broken levels before jumping higher.

XAU/USD Outlook!

Breaking and closing above 1,967 and above the upper median line (uml) activated further growth. Coming back to test and retest the R1 (1,975) and the upper median line (uml), consolidating above these downside obstacles (resistance turned into support) should bring new buying opportunities with potential targets at R2 (1,995) and at the warning line (wl1).