The price of gold crashed in the short term as the USD rallied. The DXY's rebound forced the yellow metal to turn to the downside. XAU/USD is trading at 2,008 at the time of writing and it seems determined to approach and reach new lows.
Fundamentally, the US released high-impact data today. The economic figures came in mixed. The Retail Sales and Core Retail Sales came in worse than expected, while Prelim UoM Consumer Sentiment, Capacity Utilization Rate, and Industrial Production reported better-than-expected data.
XAU/USD Massive Sell-Off!
Technically, the price action developed a potential Rising Wedge pattern which is seen as a downside reversal formation. Now, it has registered an aggressive breakdown through the uptrend line and is almost to hit the 2,0001 and the median line (ml).
These are seen as immediate downside obstacles. After its massive drop, we cannot exclude a temporary rebound as the rate could try to test and retest the broken levels.
XAU/USD Outlook!
A valid breakdown below the median line (ml) and below 2,001 activates more declines and is seen as a bearish signal. The lower median line (lml) is seen as a potential target if the rate continues to drop.
