The price of Gold extended its sell-off after escaping from a range pattern. The chart formation represented a distribution as the bias was bearish. XAU/USD is trading at 1,918 at the time of writing.
Fundamentally, the yellow metal dropped deeper as the USD is strongly bullish as the Federal Reserve is expected to continue hiking rates as the inflationary pressure grows. Gold accelerated its sell-off even even though the US data came in mixed on Friday.
Later, the German ifo Business Climate could be reported at 88.3 points versus 90.8 in the previous reporting period. In addition, the BOC Gov Macklem Speaks may bring some volatility.
XAU/USD Reached New Downside Obstacles!
XAU/USD resumed its drop after failing to retest the broken uptrend line and after making a valid breakdown below the 1,939 range's support. Now, it has dropped below the descending pitchfork's median line (ML) which represented a downside obstacle.
It has found temporary support on the 78.6% (1,913) and now it tries to retest the median line (ML). A false breakdown below the median line may signal a potential rebound in the short term.
XAU/USD Outlook!
Staying below the median line (ML) and making a new lower low, dropping and closing below 1,912 could activate a larger drop and could bring new selling opportunities.
