The price of gold edged higher and now is trading at 1,927 level at the time of writing above 1,895 today's low. After its massive drop, a temporary rebound was somehow expected. The price could rebound back higher to challenge the near-term resistance levels before deciding direction.
As you already know, the FED increased the Federal Funds Rate from 0.25% to 0.50% earlier today as expected. More rate hikes will follow in the next monetary policy meetings. The price of Gold was somehow lower after the US retail sales data came in worse than expected. Also, the Canadian CPI rose by 1.0% versus 0.9% expected.
XAU/USD 1,900 Stopped Sell-Off!
XAU/USD challenges the 50% (1,925) retracement level which stands as an upside obstacle. Technically, the 1,900 psychological level stopped the downwards movement. The yellow metal registered only a false breakdown below this level, failing to reach the weekly S2 (1,893).
As I've said earlier, a temporary rebound is natural after its strong bearish movement. Still, it's premature to talk about a new swing higher. Personally, I'll wait for strong confirmation, for a major bullish pattern before considering going long.
XAU/USD Outlook!
After ignoring the uptrend line and after its massive drop, XAU/USD was expected to rebound and recover. Technically, the price of gold was in a corrective phase. A temporary rebound towards 1,959 - 1,965 could bring new short opportunities.
A valid breakout through this resistance zone could announce a broader growth. Also, a strong consolidation in the short term above the 1,900 level could bring new long opportunities and could indicate strong growth.
