Gold prices climbed to one-week highs around $1346 Wednesday, as the greenback continues to decline against major currencies, retreating to two-week lows according to the USD index. The yellow metal is appreciating for a fourth straight day, also due to its safe haven status amid the lingering geopolitical concerns.
Spot gold is yet to confirm its bullish move. As long as prices remain below $1,348, there is still a risk of resuming the slide in the short-term. The nearest test both for gold and the dollar is the upcoming US CPI data and minutes from the Federal Reserve's March meeting, due later today. Dismal inflation figures could intensify the bearish pressure on the buck, which will send the metal even higher.
From the technical point of view, spot gold is ready for another bullish break in case of a successful retest of a local resistance $1,348. A break above will open the way to the next hurdle at $1,354. This scenario will realize in coming days, should the CPI and FOMC meeting minutes disappoint the USD.
A fresh wave of trade war fears could also add to gold’s bullishness.
By Helen Rush
Senior Analyst at Capital Markets