Technical Analysis:
Currently trading around 2357, We have seen price getting rejected from 2370-2380 zone. Price gave a huge move to the upside on Friday so we night see price dipping towards 2330 range again. We might see two scenarios in gold either we clear the buy side liquidity from 2390 range and then fall below or Price might now hold itself around 2300 zone this time and directly go below.
Fundamentals:
Gold prices held steady on Monday as investors awaited key U.S. inflation reports, which could shed more light on the timing of the Federal Reserve's first rate cut.
The U.S. producer price index (PPI) data is scheduled for release on Tuesday, followed by the consumer price index (CPI) on Wednesday.
Median forecasts are for core consumer prices to rise 0.3% in the month, compared with 0.4% in March, pulling the annual rate down to 3.6%, according to a Reuters poll.
"I suspect inflation will be stickier than people want to see, so we need to allow for a few bumps in the road - but that doesn't necessarily mean inflation will rip higher," said City Index senior analyst Matt Simpson.
"It just won't disinflate as quickly as doves hope. And that could result in some choppy trade for gold prices around these highs, at a time of year usually associated with negative returns for gold prices."
After a softer-than-expected U.S. payrolls report for April and a weak jobs report last week, expectations have increased for rate reductions this year.
Traders expect the U.S. central bank to start its easing cycle in September. Lower interest rates reduce the opportunity cost of holding gold. (FEDWATCH)
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