The price of gold crashed in the short term as USD dominated the currency market. The bias is bearish, so a further drop is still on the cards despite temporary rebounds. Gold was traded at 1,749 at the time of writing, above the daily low of 1,745.
The yellow metal is fighting hard to rebound as DXY retreated a little after its amazing rally. Fundamentally, XAU/USD resumed its drop after the FOMC Meeting Minutes. This was seen as a high-impact event on Wednesday. As you already know, the Fed is expected to continue hiking rates at its next monetary policy meetings. A 50bps rate hike is expected in September, that's why the price of gold came down.
XAU/USD Temporary Rebound?
Technically, XAU/USD resumed its drop after taking out the 1,765 and 1,755 downside obstacles. Testing and retesting the weekly S2 at 1,756 confirmed strong downside pressure. Minor rebounds could bring new selling opportunities.
Its failure to come back to test and retest the downtrend line indicates strong sellers. The 1,745 historical level represents the first downside target.
XAU/USD Forecast
Coming back to test and retest the 1,755 level could offer a new chance to go short. Also, a new lower low, dropping and closing below 1,754, could activate more declines towards the 1,739 historical level (key support).
