Gold tests $2,300 ahead of the NFP and inflation

Gold hasn’t clearly broken through $2,300, so for the time being this area is still active as a resistance and might trigger a consolidation. Looking for a counter-trend trade in the context of such a strong uptrend is extremely risky, but an immediate breakout upward is also questionable.

The overbought signal is clear from both Bollinger Bands and the slow stochastic. A high ATR coming up on December’s readings above $29 might suggest that at least this phase of the trend is mature and the consolidation could be extended. However, that depends on the important upcoming data, the NFP and inflation.

Above $2,300, $2,320 seems like a possible resistance, the 100% weekly Fibonacci extension. As in the second half of March, waiting for a retracement lower would traditionally give a less risky entry for a new buyer, but it’s challenging to pinpoint where the endpoint of the next retracement might be.

A move back below $2,200 seems very unlikely in the next few days unless upcoming releases are surprising. However, a possible retracement in the near future might be minimal like in March.

This is my personal opinion which does not reflect the opinion of Exness. This is not a recommendation to trade.