The price of gold plunged in the last hours as USD dominated the currency market. The Dollar Index has resumed its growth, boosting the greenback and forcing the yellow metal to drop. XAU/USD was traded at 1,812 at the time of writing.
Gold is strongly bearish in the short term as the FED is expected to increase the Federal Funds Rate from 1.00% to 1.50% tomorrow. Today, the US PPI reported showed 0.8% growth in May matching expectations, while the Core PPI surged by 0.5% versus the forecast of 0.6%. XAU/USD could register sharp movements tomorrow around the FOMC meeting and after the US retail sales indicators will be released.
XAU/USD Range Pattern
As you can see on the H4 chart, XAU/USD registered only false breakouts through the 1,869 key resistance, signaling exhausted buyers. It has also failed to stay above the uptrend line, announcing a potential downside continuation.
Now, it has registered a valid breakdown below the 1,828 level, confirming more declines despite temporary rebounds in the short term.
XAU/USD Forecast
Now, it challenges the 1,812 former low which represented a static support level. Stabilizing below this level may signal a further drop. A bearish closure below 1,809 could bring new short opportunities. 1,786 stands as a major downside target.
