Gold – Edges lower after failing at $1,960 but is the recovery over?

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<li><strong>Gold pares gains after post-inflation bounce</strong></li>
<li><strong>US yields remain lower, pulling the dollar down with them</strong></li>
<li><strong>Resistance levels remain above at key Fibonacci levels</strong></li>
</ul>
<p>Gold has rotated lower over the last couple of days after previously recovering on the back of encouraging US inflation data.</p>
<p>The decline in US yields that we’ve seen since the release has weighed heavily on the US dollar and given the yellow metal a real boost after having endured a pretty torrid May and June.</p>
<p>
<p><strong>Is the recovery sustainable?</strong></p>
<p>The rotation occurred around $1,960 which was the first notable test of resistance after breaking above $1,940 earlier in the week.</p>
<p><strong>XAUUSD Daily</strong></p>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53.png" target="_blank" rel="noopener"><img loading="lazy" class="aligncenter wp-image-806425" src="https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53-1024×441.png" alt="" width="619" height="267" srcset="https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53-1024×441.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53-300×129.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53-768×331.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53-1536×662.png 1536w, https://www.marketpulse.com/wp-content/uploads/2023/07/XAUUSD_2023-07-17_20-59-53.png 1793w" sizes="(max-width: 619px) 100vw, 619px" /></a></p>
<p>Source – OANDA on Trading View</p>
<p>It falls around the 38.2% Fibonacci retracement level – May highs to June lows – and now the focus will be on whether that prior resistance level – $1,940 – turns into support.</p>
<p>Confirmation of the breakout – which may come from the price now finding support at $1,940 as it was previously resistance – could be bullish although there remains plenty of resistance ahead.</p>
<p>If the price does trend higher from here, the next tests of resistance could come around $1,980 and $2,000 which are the 50% and 61.8% Fibonacci retracement levels of the above move, respectively. The latter is also a major psychological level.</p>