Gold: inflation data on the watch

Posted US unemployment figures increased investors' sentiment that the Fed might cut interest rates in September this year, as weakening jobs market data might put a halt to further inflator pressures. The sentiment was negative for the US Dollar, and supportive for the price of gold. Gold started the previous week around the level of $2.320 and continued with an up-trend till the end of the week. Friday's jobs figures pushed the gold to the highest weekly level at $2.391, where the price of gold is ending the week.

The RSI reached the level of 61 on Friday, but the overbought market side has not been reached. It leaves some space for the further move to the upside of the price of gold. Moving average of 50 days is moving parallel to MA200, but the distance between lines is not suggesting that the cross might come anytime soon.

A strong move of a price toward one side, usually suggests that the short term correction might occur in the coming period. In this sense, there is some possibility for a short correction of the price of gold, at least to the level of $2.360. Still, it should be considered that the US inflation rate and PPI figures for June will be posted in a week ahead, which might bring some volatility back on the market. On the upside, there is a high probability that the level of $ 2.420 might be tested, but not breached.