The price of gold rallied in the short term as the Dollar Index plunged. USD's depreciation versus its rivals helped the yellow metal to come back higher. Technically, after its massive, a rebound was natural. It was traded at 1,839 at the time of writing far above 1,810 today's low.
XAU/USD increased by 1.70% from today's low to today's high of 1,841 level. Fundamentally, the Australian Unemployment Rate dropped from 4.0% to 3.9% as expected, while the Employment Change came in at 4.0K below 30.0K estimates.
Earlier, the US reported worse than expected data, this could be good for XAU/USD. The Unemployment Claims climbed from 197K to 218K in the last week, while the Philly Fed Manufacturing Index dropped unexpectedly lower from 17.6 points to 2.6 points far below 14.9 expected.
XAU/USD Strong Rally!
XAU/USD dropped a little in the short term after finding resistance at 1,831. Still, the sell-off was only a temporary one, the rate found support at the 1,807 level, and now it has rallied, ignoring the 1,831 key level.
As you can see on the h4 chart, Gold reached the downtrend line which represents a dynamic resistance. As long as it stays below this line, the bias remains bearish.
XAU/USD Forecast!
Gold could register a new sell-off if it makes only false breakouts above the downtrend line and if it fails to stabilize above 1,831.
Stabilizing above the 1,831 and making a valid breakout through the downtrend line may signal further growth and could bring new long opportunities.
