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Hugo in HTO Trading,

GOLD: Bullish momentum is piking up

August CPI missed expectations, coming in at -0.2%. That dropped the annual pace of inflation to 1.7%, from 2.0% in July. Core CPI was unchanged, on expectations of +0.2%.

Gold should start picking up for various reasons, the most important of which is that is near important support. If the dollar continues higher then gold could crash key support, but this doesn’t look likely short-term because the dollar is now critically overbought and needs to have a correction.

Gold is still is a bearish phase but rose on yesterday session and closed near the high creating a hammer pattern that suggests a bullish momentum is picking up.

Expecting an upward move to 1244.96 on a break above previous day high at 1227.83 (scenario 1) or a break below previous day low at 1215.68 could push GOLD to a daily support at 1182.47 (scenario 2).