It’s a really aggressive environment for gold prices right now. They’re approaching key technical support levels right ahead of the highly anticipated release of U.S. Consumer Price Index (CPI) data. In order to kick off a full-fledged rebound, gold would first have to reclaim the flag’s resistance at $3,359. This level will be an important battleground for bulls and bears, with short-term resistance immediately overhead at $3,365. Failure to close above this level may prevent gold from further recovery.
The next major overhead resistance is at $3,375. If gold is able to break above this level, it will most likely set in motion quick movement toward the $3,385 to $3,390 area. Look out for that good news breakthrough! This is the most important area because it would move the short-term trend into bullish territory. Further intraday gains are limited by the current resistance level of $3,359. Traders are closely monitoring the price being tossed around this major psychological barrier.
In the present, gold’s support is $3,340. This important level is currently under threat and attack, an onslaught that seeks to erode its import strength. If gold breaks support at $3,340, we might start to see more pronounced risks. This drop will likely send prices down to significant support at $3,322 and $3,298. The latter indicates the key support level and aligns with gold’s 78.6% Fibonacci Retracement zone.
Further adding toward the technical picture, the $3,338 level is noted as the 50% Fibonacci retracement zone for gold. This Fibonacci level is frequently a psychological wall for traders, deciding where to buy and sell. With a continued daily close below $3,340 to serve as the trigger for the next leg down, I could see that creating some more downward pressure on price.
Market participants remain cautious as they await the CPI data release, which is expected to provide insights into inflation trends and economic health. This knowledge can dramatically nerf the direction gold is headed. Gold as the Ultimate Safe Haven Asset Throughout history, gold has been a key safe haven asset, particularly in times of uncertainty.