XAU/USD is trading in the red today and it could come back down to pressure the critical support area. It has rebounded after the most recent sell-off, but this bounce-back could be only a temporary one.
Gold is traded at the $1,878 level and it could continue to move sideways within a neutral zone before choosing direction. Gold could decline if the USD grows after the US inflation data. USDX has rebounded in the short-term, but we still need strong confirmation that the index will develop a significant leg higher.
GOLD Imminent Breakdown
The gold price has rebounded but the selling pressure remains high as long it stays under the $1,900 psychological level. Still, a major drop could be confirmed only by a valid breakdown through the $1,862 - $1,848 levels.
A sideways movement between the $1,900 and the $1,848 is favored in the short term. The COVID-19 crisis and the global risk could boost the price anytime again. On the other hand, the risk-on sentiment may dominate the markets.
- XAU/USD Trading Conclusion
Sell from below the $1,848 level, a new lower low, with a first downside target at the $1,800 level.
The price could increase in the short-term after the most recent sell-off, but it could decline again. So, we may have a long opportunity if XAU/USD registers another false breakdown with great separation below the near-term support levels or after forming any other bullish reversal pattern.
