Gold prices have recently fallen by around 7% from their peak, now trading at approximately $2,602 per ounce. This decline is largely attributed to the strengthened U.S. dollar, driven by post-election optimism following Donald Trump’s win. The inverse relationship between gold prices and the U.S. dollar plays a role here, as a stronger dollar makes dollar-denominated assets, like gold, pricier for international investors. With the “Trump trade” still in effect, many traders have flocked to the dollar as the world’s reserve currency. However, it remains uncertain how long this trend will persist.

Currently, gold is hovering around a technical support level at $2,605 per ounce, having dipped briefly to $2,589. Recent buying activity suggests investors may be positioning ahead of tomorrow's U.S. CPI data. Should gold close below the $2,605 mark, attention may shift to the 100-day moving average (100MA), currently at $2,571. A break below this level could signal further downside potential for gold.

A closer look at the daily chart reveals additional technical signals. The price is pressing the lower band of the Bollinger Bands, and the Relative Strength Index (RSI) is at 34, suggesting that gold may be nearing oversold territory. The last time RSI was this low was in February, which may hint at a short-term recovery.

If the price consolidates around current levels, gold could rebound to the $2,650–$2,670 range, where resistance is likely. This resistance aligns with both the 50-day moving average (50MA) and the high seen in September. Traders may keep a close eye on these levels as potential bounce-back zones.

Key Points:

• Gold Price Decline: Down around 7% from its high, trading at $2,602 per ounce.
• US Dollar Impact: A strong dollar makes gold more expensive for foreign buyers, affecting demand.
• Technical Support: Key support at $2,605, with potential downside to 100MA at $2,571.
• Indicators to Watch: Bollinger Bands and RSI suggest gold may be oversold near-term.
• Resistance Levels: Possible rebound target of $2,650–$2,670 if consolidation occurs.

Investors will likely monitor tomorrow's CPI data release closely, as it could further influence gold's direction and confirm or challenge current support and resistance levels.