Gold dropped in the short term as the Dollar Index tried to rebound. Still, this could be only a temporary drop before resuming its growth. The bias remains bullish, so temporary drops could bring us new long opportunities. It's trading at 1,872 at the time of writing. After its growth, a minor drop could be natural.
Fundamentally, the yellow metal dropped ahead of the US inflation data. As you already know, the Consumer Price Index will be released tomorrow and is expected to report a 0.1% fall in December. The CPI y/y could drop from 7.1% to 6.5%, while Core CPI m/m may report a 0.3% growth beating the 0.2% growth in the previous reporting period. In my opinion, higher inflation could force the XAU/USD to drop, while lower inflation could boost the price of gold.
XAU/USD Exhausted Buyers!
Technically, the price of gold failed to stabilize above the R1 (1,882) and above the channel's upside line. Surprisingly or not, it has failed to resume its growth despite its temporary consolidation.
The 1,867 former low and the 1,865 previous high represent downside obstacles. This area could stop the sell-off.
XAU/USD Outlook!
Testing and retesting 1,867 - 1,865 could announce a new leg higher. Coming back above the R1 (1,882) and above the upside line, a new higher high may announce further growth. This is seen as a long opportunity.
Taking out the 1,865 support could announce a deeper drop. This scenario could bring short signals
