Improving macroeconomic data have intraday sparked an expected pullback in precious metals, although chart technicalities would forecast in the longer term a continuing appreciation in precious metals as commodities prices would continue to increase and with that Gold inflation edge carry trade could see assets managers and funds shifting their positions into holding Gold and Silver.
The Gold chart on a month time scale has responded to precise technical inputs that could determine a series of outcomes. After having breached in 2020 with a new high, the 2011/2012 highs, the Gold price trendline has technically pulled back twice more in the same price range $1910/oz<$1960/oz signal of precious metals market investors that those levels have been quite sensible to sell-off. However, the broader Gold trendline pattern has been of Cup & Handle uptrend pattern, now the sideway consolidation allows to structure the handle support in order for Gold to probably be priced much higher than $2000/oz. There are two key Gold price levels that could have to be checked as a possible technical entry point for the buy reversal: Gold $1770/oz support on 2012 highs would shape an Inverse Head & Shoulder pattern bullish reversal that could then break out to the upside of the long term Gold channel structure, going to Gold $2200/oz but also Gold $2600/oz.
Other Gold price technical entry point could be Gold $1670/oz that would get an input support by the Kijun line also shaping a double bottom pattern, with a similar buy signal trailing for upside to new highs.
The third possible scenario could see the Gold price trendline breaking down and drifting lower to test IKH Senkou A/B nuage and the channel structure support to then continue its grinding higher to Gold $2400/oz. This scenario could be less likely to structure going forward given the ongoing increase in commodity prices, continuous structural macroeconomic factors and Inflation in a 3%<4% range and with rising Producer Prices Index also Gold producers could see the necessity of pricing in higher cost input for Gold as a material for industrial utilization, considering also that large countries as India have made record Gold imports in April for 160 tonnes of the precious metal, a signal of higher demand for the precious metal from Sovereign funds as well.