Gold sees dip demand ahead of US CPI release

• Multiple long-tailed doji candles indicate dip demand.
• Weak US CPI reading could yield a minor rally in gold.

Gold has created back-to-back doji candles at the 200-day moving average support, indicating persistent dip demand.

Currently, the 200-day moving average is located at $1,306 and the metal (XAU/USD) is changing hands at $1,315/Oz. The short-term momentum studies - 5-day MA and the 10-day MA have bottomed out. So, it appears the stage is set for a minor rally.

That said, it all depends on the US consumer price index (CPI), scheduled for release at 12:30 GMT today. An above-forecast reading will likely put a bid under the greenback, resulting in a fresh wave of selling in gold.

On the other hand, a below-forecast print could yield a pullback in the USD, leading to a corrective rally in gold as indicated by the technical chart.

Gold Technical Levels

The metal seems to have found acceptance above the 50-candle MA in 4-hour chart. A break above $1,319 (immediate resistance as per 4-hour chart) could yield $1,325 (resistance in 4-hour chart). On the downside, support is seen at $1,312 (50-candle MA in 4-hour chart) and $1,300 (psychological mark).