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• Gold retreats below $1,965 amid cautious trading ahead of major central bank meetings.
• Investors brace for key monetary policy decisions from the Fed, ECB, and BOJ.
• US inflation data release adds to market anticipation and potential impact on economic outlook.
• Over 70% chance seen for the Fed to keep rates unchanged, with uncertainty on future tightening.
• BOJ expected to maintain ultra-loose monetary policy, while ECB likely to raise rates to combat inflation.

Gold retreats by approximately 0.6% to $1,965 in the New York trading session, drawing attention to an important development: the formation of an outside bar close on the monthly interval. This suggests a potential shift in the bullish market sentiment, contingent upon the direction of monetary policy. Any indications of a pause, rate cut or data which reduces the risk of a recession in the US could prompt a downward turn in the Gold market.

Technically, this initiation aligns with the possibility of upcoming dovish-favored data. Notably, there is a macro bracket in play, with core selling emerging around current extremes and confluent selling tails.

However, it’s important to note that the interpretation of data and its impact on the market ultimately depends on the investor’s perception. In the case of gold, data indicating easing inflationary pressures may be seen as supportive for the price. In summary, data suggesting an economic recession might be viewed as bullish for gold, while robust economic data could be considered a bearish factor.

On a weekly basis, the market closes with an inside bar, prompting traders to target extremes for potential absorption and to monitor the development of an inside bar failure pattern, which could offer insights for the upcoming week. The daily perspective reveals a balanced price range, leading traders to lean on extremes to decipher rotational scenarios. Presently, buying activity may be observed around the swing lows as buyers enter the market amidst selling pressure.

Volatility indicators in the short and medium term show a negative bias, indicating the potential for an upward surge in the market as investors await data to shape the ongoing auction process. Additionally, the lower dollar, when viewed from a median perspective, may contribute to a favorable environment for an upward rotation, although the current higher dollar poses a pressure factor.

Analyzing the volume profile structure for the week, a double distribution profile is evident, with the market poised to fill the low volume area. Market participants may seize opportunities to engage in buying activity around the lower distribution’s Point of Control (POC) level.

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