The price of gold rebounded today and now is trading at 1,916 as the Dollar Index crashed. The USD's depreciation helped XAU/USD to turn to the upside. Still, after its strong rally, the yellow metal stands below strong upside obstacles.
In the short term, Gold dropped after the Canadian Consumer Price Index reported a 0.6% drop as expected. Today, the UK CPI y/y came in at 10.5% as expected, while Core CPI reported a 6.3% growth versus the 6.2% estimated.
Later, the US PPI, Core PPI, Retail Sales, and Core Retail Sales could really shake the markets. These are seen as high-impact events, so the volatility could be high. Better than expected US data should boost the USD and could send XAU/USD down.
XAU/USD Strong Rebound!
As you can see on the H1 chart, the rate failed to stay below the weekly pivot point of 1,902 and now it challenges the broken uptrend line and the 1,916 static resistance. The 1,916 - 1,919 area stands as a strong resistance zone.
It remains to see how it will react around the resistance levels as the fundamentals are decisive later. The upper median line (uml) stands as a dynamic resistance.
XAU/USD Forecast!
Staying below the uptrend line and under 1,916, registering only false breakouts may announce a new sell-off. This is seen as a short opportunity. This scenario could take shape also if the US reports positive data.
Ignoring the resistance levels and taking out also the upper median line (uml) may signal further growth.
