The price of gold dropped on the h4 chart after failing to make a new higher high. It's trading at 1,995 at the time of writing below 2,009 today's high. In the first part of the day, the yellow metal rallied ahead of the ECB and before the US inflation data publication.
In the short term, the buyers seem exhausted, that's why XAU/USD could slip lower or it could move sideways trying to accumulate more bullish energy before jumping higher. The US Consumer Price Index reported a 0.8% growth in February matching expectations, higher versus 0.6% growth in January, while the Core CPI rose by 0.5% as expected. The inflationary pressure remains high, that's why the price of gold maintains a bullish bias.
XAU/USD Trading In The Red!
As you can see on the H4 chart, XAU/USD failed to reach and retest the 1,965 - 1,959 support zone. In the short term, it challenges the weekly R1 (1,997). Failing to stay above it may signal that the price could come back down to test and retest the support area and the uptrend line.
As you already know from my previous analysis, the price of gold could develop a new leg higher as long as it stays above the uptrend line. The bias remains bullish despite temporary declines.
XAU/USD Prediction!
Staying above 1,997 weekly R1 and making a new higher high, closing above 2,009 could activate further growth.
A new great long opportunity could appear if the rate comes back to test and retest the 1,959 - 1,965 zone and the uptrend line. Also, a strong consolidation could announce a new leg higher.
