XAU/USD: gold prices in symmetrical triangle awaiting key CPI data
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Gold prices are navigating a critical juncture, trading near $2,680 per ounce on Wednesday as a symmetrical triangle pattern forms on the daily chart. This technical formation suggests an imminent breakout, with traders closely watching the Consumer Price Index (CPI) report to determine the next move.
Technical setup: symmetrical triangle in focus
On the daily timeframe, gold is charting higher lows and lower highs, creating a symmetrical triangle pattern. This structure reflects a market in consolidation, with neither bulls nor bears able to establish dominance. The resistance line from above and the support line from below are converging, signaling an inflection point that could drive a significant price move.
A breakout above the resistance line would indicate bullish control, potentially driving prices higher. Conversely, a breakdown below the support line could hand momentum to the bears, pressuring prices downward.
CPI data: the catalyst for volatility
The December CPI report, scheduled for release today, is expected to show an annual increase of 2.9%, up from November’s 2.7%. If realized, this would underscore persistent inflationary pressures, potentially influencing the Federal Reserve’s monetary policy outlook.
However, there is some room for optimism. The Producer Price Index (PPI), released yesterday, showed a surprise slowdown with a monthly increase of just 0.2%, below expectations of 0.4%. This softer-than-anticipated data has fueled speculation that consumer prices may not rise as sharply as forecast.
What’s next for gold prices?
Gold traders are bracing for heightened volatility following the CPI release. A higher-than-expected CPI reading could spark concerns about prolonged inflation, likely supporting gold as a hedge. Alternatively, a softer print may weigh on bullion, as it could reduce the urgency for additional monetary tightening by the Fed.
With the symmetrical triangle nearing its apex, the market awaits a decisive move. Whether the breakout favors bulls or bears, the outcome will likely shape gold’s trajectory in the coming weeks, offering traders actionable opportunities in a volatile market.
Technical setup: symmetrical triangle in focus
On the daily timeframe, gold is charting higher lows and lower highs, creating a symmetrical triangle pattern. This structure reflects a market in consolidation, with neither bulls nor bears able to establish dominance. The resistance line from above and the support line from below are converging, signaling an inflection point that could drive a significant price move.
A breakout above the resistance line would indicate bullish control, potentially driving prices higher. Conversely, a breakdown below the support line could hand momentum to the bears, pressuring prices downward.
CPI data: the catalyst for volatility
The December CPI report, scheduled for release today, is expected to show an annual increase of 2.9%, up from November’s 2.7%. If realized, this would underscore persistent inflationary pressures, potentially influencing the Federal Reserve’s monetary policy outlook.
However, there is some room for optimism. The Producer Price Index (PPI), released yesterday, showed a surprise slowdown with a monthly increase of just 0.2%, below expectations of 0.4%. This softer-than-anticipated data has fueled speculation that consumer prices may not rise as sharply as forecast.
What’s next for gold prices?
Gold traders are bracing for heightened volatility following the CPI release. A higher-than-expected CPI reading could spark concerns about prolonged inflation, likely supporting gold as a hedge. Alternatively, a softer print may weigh on bullion, as it could reduce the urgency for additional monetary tightening by the Fed.
With the symmetrical triangle nearing its apex, the market awaits a decisive move. Whether the breakout favors bulls or bears, the outcome will likely shape gold’s trajectory in the coming weeks, offering traders actionable opportunities in a volatile market.