Gold consolidates just under $5,200 after the breakout
Gold regained its upside momentum on Tuesday, posting notable gains after several days of choppy, sideways trading. The precious metal finally broke above the critical resistance level of $5,200—a barrier it had struggled to surpass since last Wednesday. On Tuesday, XAUUSD briefly broke out of this range, hitting a fresh 6-day high of $5,230 before pulling back to below $5,200 again.* Market focus now shifts to the upcoming US inflation data, with traders looking for insights into the Federal Reserve’s monetary policy direction.
Gold rebound cools ahead of key US inflation data
Despite the recent two-day rebound, gold is struggling to sustain momentum as bulls pause ahead of today’s US CPI report. The US Bureau of Labor Statistics will release February’s inflation figures at 13:30 GMT. These data are crucial, as headline and core inflation readings influence expectations for the Fed’s policy moves. A hotter-than-expected CPI could extend the recent pullback in precious metals, while a softer reading might reignite bullish momentum and push gold back above $5,200.
Can bulls maintain momentum above $5,100?
From a short-term technical perspective, $5,110/00 has emerged as a strong new support level. As of this writing, gold is trading near $5,180. Moving ahead, as long as the price remains above the $5,110/00 (20- SMA) level, the short-term positive trend will continue. If gold regains momentum and overcomes the $5,200 level again, it might go on to the next supply area of $5,240/70. On the downside, there is a danger that if the metal fails to settle above $5,100, a close below this support level could trigger further consolidation or a corrective phase.
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* Past performance is no guarantee of future results.
