GOLD (XAU/USD) KEY POINTS:
- Gold (XAU/USD) Attempts at a Range Breakout Fall Short as US Yields and the DXY Bounce.
- US 10Y Yield Back Below the 4% mark.
- Bull Flag and Price Action Still Hint at Upside Breakout but Macro Factors Are Likely to Drive the Move with US CPI Ahead.
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Gold has remained confined to the range between $1890 and $1940 for the better part of 3 weeks. The pair has attempted a break of the range on either side to no avail as markets remain cautious ahead of a busy month of Central Bank meetings. US CPI could serve as a catalyst tomorrow with expectations hinting at a softer print which could push Gold back above the $1940 handle.
The lack of follow through of late has seen anticipation build for another bullish rally for the precious metal toward the $2000/oz mark. However, with the Fed poised to return with a rate hike this month following a pause in June, any rally in the interim may prove short-lived.
Not much ahead in the US session in terms of event risk with attention likely turning to the US CPI release tomorrow.
IG CLIENT SENTIMENT DATA
Taking a look at the IG client sentiment data and we can see that retail traders are currently net LONG on Gold with 68% of traders holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment meaning we could see Gold prices continue to decline following a short upside rally.