- Gold regains strength after rejection above $1,730.
- The dollar with modest falls on Tuesday.
- Volatility is expected ahead with the US inflation data.
The Prayed is trading in the area of daily highs at $1,727, after gaining support at $1,720. The pullback came from almost two-week highs reached on Monday at $1,735. Traders await key US data.
At 12:30 GMT, the evolution of inflation in the US in August will be known. The market consensus is that the annual rate of the Consumer Price Index goes from 8.5% to 8.1%. The data has great potential to affect the market and generate volatility.
The dollar it was weakened in recent sessions, in anticipation of this event, which could reaffirm the theory of a peak in inflation, which would cause the Federal Reserve to slow down the pace of monetary tightening. However, whatever the number, it is estimated that for next week’s FOMC meeting a 75 basis point hike will remain the base case.
No power with $1730
The Monday gold hit the highest since late August and climbed to $1735, but failed to hold and returned below $1,730. This last level is key, and the 20-day moving average is also passing through there. A consolidation above would point to more gains, with a possible target in the $1745 area.
Should it fail to hold above $1,730 again, rallies will remain unstable. The first support appears at $1720. Underneath the area of $1710 and then $1700 will be exposed.
Technical levels
Source: Fx Street
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