Gold continues to move somehow sideways in the short term. The yellow metal tried to recover as the Dollar Index was in a corrective phase. Still, the bias remains bearish as the central banks continue to hike rates. Technically, the rebound could bring new selling opportunities.
XAU/USD was trading at 1,708 at the time of writing. Gold changed little despite the UK and the Canadian inflation data. The UK Consumer Price Index reported a 9.4% growth versus 9.3% expected, while the Core CPI surged by 5.8% matching expectations. On the other hand, the Canadian CPI rose by only 0.7% less versus 0.9% expected and compared to 1.4% in the previous reporting period, while Core CPI registered a 0.3% growth versus 0.8% growth in the previous reporting period.
Fundamentally, the BOJ and the ECB could really shake the markets tomorrow. Gold could register sharp movements around these high-impact events.
XAU/USD Bears In Charge!
XAU/USD is trapped between the downtrend line and the uptrend line. Also, it moves sideways between 1,697 and 1,723 levels. In the short term, it could continue to move sideways.
I'll wait for an upside or downside breakout before taking action. Technically, the temporary rebound could represent a flag pattern (up-channel) which could announce more declines. The bias is bearish, so personally, I'll look for shorts.
XAU/USD Forecast!
As long as it stays under the downtrend line, the bias is bearish. A new lower low, dropping and closing below 1,697 could activate more declines. This scenario could help the sellers to go short again.
Only a valid breakout above the downtrend line and above the 1,723 could activate a swing higher and could invalidate a downside continuation.
