The price of gold is trading in the red at 1,982 level at the time of writing, above 1,976 today's low. XAU/USD dropped by 4.56% from yesterday's high of 2,070 to today's low. In the short term, it seems unstoppable, it could approach and reach fresh new lows.
The yellow metal plunged amid potential diplomatic solutions that could alleviate the geopolitical tensions. Gold dropped even if the Dollar Index plunged. JOLTS Job Openings indicator was reported at 11.26M far above 10.96M estimates. It remains to see how the price of Gold will react tomorrow around the ECB and after the US inflation data will be released.
XAU/USD 1,965 As Next Downside Target!
XAU/USD plunged after failing to reach the 2075 resistance level and after registering a false breakout through the channel's resistance. The price ignored the 2,000 psychological level and the weekly R1 of 1,998 signaling a deeper drop.
1,959 - 1,965 area stands as a demand zone, as a support area. It remains to see how XAU/USD will react if it reaches these downside obstacles. After this amazing sell-off, a rebound is expected.
Gold Outlook!
After the current sell-off, XAU/USD could develop a rebound. Despite the current massive drop, the price of gold maintains a bullish bias as long as it stays above the uptrend line. Gold could test and retest the 1,965 - 1,959 area before starting to grow again.
The sell-off could help the buyers to catch a new swing higher. It's hard to believe that Gold will drop below the immediate downside obstacles before coming back higher.
