The price of gold was trading at 1,776 at the time of writing. In the short term, XAU/USD tried to rebound and recover after its last drop. Today, the fundamentals moved the price, that is why Gold seems undecided. Technically, the price action signaled a broader downside movement, so the bias is bearish.
As you already know, the Canadian CPI came in line with expectations, registering 0.1% growth but below 0.7% growth in the previous reporting period, while the Core CPI surged by 0.5% versus only 0.3% growth in the previous reporting period. Furthermore, the US Building Permits, Capacity Utilization Rate, and Industrial Production came in better than expected, while Housing Starts reported worse than expected data.
Tomorrow, the RBNZ and the US retail sales data could bring some volatility and sharp movements in Gold.
XAU/USD Range Pattern
XAU/USD failed to stay above the uptrend line. Dropping and stabilizign below 1,783 activated the Rising Wedge pattern. In the short term, the yellow metal will be trapped between the 1,773 and 1,783 levels. Escaping from this formation could bring new trading opportunities.
As long as it stays under the upper median line (uml) and below the S1 (1,779), XAU/USD could extend its downside movement.
XAU/USD Outlook
A new lower low, dropping and closing below the 1,771 today's low could activate more declines and could bring new short opportunities. The median line (ml) and the 1,765 are seen as downside targets.
