Gold Price Starts Correction, US CPI Next

Key Highlights

• Gold prices started a downside correction from the $2,010 zone.

• A major declining channel is forming with resistance near $1,945 on the 4-hour chart.

• Crude oil prices are attempting a recovery wave from the $75.00 zone.

• The US Consumer Price Index could decline from 3.7% to 3.3% in Oct 2023 (YoY).

Gold Price Technical Analysis

Gold rallied further and surpassed the $2,000 level amid the ongoing Israeli–Hamas war. The price traded as high as $2,009 before the bears appeared.

The 4-hour chart of XAU/USD indicates that the price started a downside correction below the $2,000 level. There was a drop below the $1,980 level and the 100 Simple Moving Average (red, 4 hours).

The price spiked below the 50% Fib retracement level of the upward move from the $1,867 swing low to the $2,009 high. The price is now consolidating near the $1,945 zone. There is also a major declining channel forming with resistance near $1,945 on the same chart.

Immediate resistance is near the $1,945 level. The first major resistance is $1,955. An upside break above the $1,955 level could send the price soaring toward the $1,965 resistance. The next major resistance is near the $1,972 level, above which Gold could test $1,985.

On the downside, the first major support is near the $1,938 level. The main support sits near the $1,920 level and the 200 Simple Moving Average (green, 4 hours). It is close to the 61.8% Fib retracement level of the upward move from the $1,867 swing low to the $2,009 high. Any more losses might call for a move toward the $1,900 level.

Looking at crude oil prices, the bulls appeared near the $75 zone and the price is now attempting a recovery wave.