Gold is currently retracing to a previous support zone that may hold as resistance following an earlier selloff.
Ultimately, sticky pricing pressures have been reflected in inflation-related measures, and the most recent quarterly GDP price index was no different.
Due to concerns that U.S. borrowing prices would remain higher for longer, gold lost a lot of ground versus the greenback. However, gold was able to regain some of its lost territory after U.S. flash PMI data earlier this week fell short of forecasts.
But given that dollar bulls may stage a recovery, resistance at the 38.2% Fib, S1 ($2,338), and the previous support area around $2,350 seems to be holding. Whether or if a larger retracement is feasible could be determined by the next U.S. core PCE price index.
A larger decline might take the market to the 61.8% Fib, which is located around the broken short-term trend line at $2,375. This could be the tipping point for a bearish correction. Keep an eye out for a continuation of the selloff to the next bearish objectives at the swing low near S2 ($2,284) if any of the Fibs hold.
Remember that a trend change was indicated by the 100 SMA crossing below the 200 SMA, and that both technical indicators might also serve as dynamic resistance levels.
