Technical Analysis:
GOLD is trading around 2400, price have already stretched a lot and if gold wants to go more to the upside it might fill the imbalance left below and then move to the upside. 2385-2390 zone will Ibe important for those looking for buying opportunities.
Fundamentals:
Gold prices rallied to their highest since May 22 on Thursday after an unexpected decline in U.S. consumer prices. The data strengthened the view that the disinflation trend has resumed and fuelled investor optimism that the Federal Reserve is one step closer to considering rate cuts.
"The Fed has been adopting an increasingly dovish stance, admitting that consumer prices are moving in the right direction and that inflation doesn’t have to reach 2% for the central bank to start cutting rates," said Ricardo Evangelista, senior analyst at ActivTrades.
Focus now shifts to the U.S. producer price index (PPI) reading, due at 1230 GMT.
Markets are now pricing in a 93% chance of a rate cut in September, compared to a 70% chance before the data was released, according to the CME FedWatch Tool. Another cut is expected by December.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
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