The price of gold is sliding at the time of writing. It's located at 1,839 and it seems vulnerable to slipping lower after failing to take out strong resistance levels. XAU/USD invalidated a larger downside movement and it has signaled a potential upwards movement.
From the technical point of view, Gold moves somehow sideways in the short term. Fundamentally, the UK and Canadian inflation data brought high volatility today and sharp movements.
The Canadian CPI rose by 1.4% versus 1.0% expected, while the UK CPI registered a 9.1% growth matching expectations. Higher inflation pushed the yellow metal higher, but the rate reached strong resistance and now it has turned to the downside.
XAU/USD Rallied On Higher Inflation Data!
XAU/USD rallied after breaking above the downtrend line, above the channel's resistance. Now, it has found resistance at the 1,844 level which represents a strong upside obstacle.
In the short term, it could come back to test and retest the broken downtrend line and the 1,833 - 1,832 area. As long as it stays above these downside obstacles, XAU/USD could develop a new bullish momentum.
XAU/USD Forecast!
Gold dropped but the price could start increasing again as long as it stays above the 1,833 - 1,832 area.
Jumping, closing, and stabilizing above 1,844 could activate further growth and could bring buying opportunities. The weekly R1 (1,877) stands as an upside target.
