The price of gold crashed in the last two hours after retesting the upside obstacles. XAU/USD rallied right after the US data publication but it has failed to stay higher signaling strong sellers and a potential deeper drop. A larger downside movement needs confirmation, so we'll have to wait for a fresh opportunity.
The yellow metal rallied in the short term as the US reported poor economic data today. The Core PCE Price Index rose by only 0.3% versus 0.4% expected, Unemployment Claims came in at 231K versus 228K forecasted, Personal Spending surged by 0.2% less versus 0.4% estimated, while Chicago PMI dropped unexpectedly lower from 60.3 points to 56.0 points below 58.1 predictions.
XAU/USD Challenges 1,805 Key Level!
I've told you in my previous analyses that Gold could drop deeper if it makes a valid breakdown from the triangle pattern. XAU/USD dropped as much as 1,802 today where it has found support.
The price came back to test and retest the 1,820 - 1,823 resistance area and the triangle's downside line which represents a dynamic resistance. Now it has plunged and it could challenge the 1,805 support again.
The bias is bearish, a new lower low, dropping and closing below 1,802 could activate more declines. A valid breakdown could help the sellers to go short again.