Cautious ahead of inflation data due later in the week

Gold is potentially setting up for another breakout attempt after the strong rejection on Friday. Currently trading at around $2,334 an ounce in the European session, with the price floating around the trendline resistance of the triangle drawn on the chart. We can see the price of gold on the daily chart is just above the upper trendline, but a move above $2,341 and then $2,368 is required to confirm a breakout towards the upside. A dip back into the triangle area would suggest that the intensity of the momentum is too weak at present for a clear upward price move. A break above $2,368 would then shift the focus towards $2,387 and then back to $2,400 and beyond. The support for the near-term and heading into the PCE data on Friday currently sits at $2,322, which is today’s low. Then there is Friday’s low of $2,316 followed by $2,306. A break below $2,306 would put the bulls on the backfoot with bears then targeting the support area of $2,277-$2,295. The MACD did turn positive last week but as we can see after Friday’s sell-off, it is now rather flat. Similarly, so is the RSI as it reads 48. Clear caution ahead of inflation data.