Gold has recovered since the significant drop around inflation

Gold has recovered steadily since the significant drop around inflation on 13 February. Now that the price is within the value area between the 50 and 100 SMAs, it might consolidate for a while before resuming gains around the next important release. There’s no sign of saturation from either the slow stochastic or Bollinger Bands. Although the long-term trend from the weekly chart is upward, on D1 it’s sideways since December.

That makes the most likely scenario in the near future consolidation within a shrinking range. Next week the focus is on second estimate GDP on Wednesday followed by personal consumption expenditures and personal income and spending on Thursday. These probably won’t have as big an effect on markets as inflation or the NFP but traders should remain alert to the possibility of a fakeout upward if the releases are surprising.