The price of gold climbed as much as 2,048 today where it has found resistance. Today's rally was caused by the US inflation data dump and was only temporary. Technically, the price action developed a downside pattern. Now, it's trading at 2,026 at the time of writing.
Fundamentally, the US inflation figures represented high-impact events today. The Consumer Price Index and Core CPI registered a 0.4% growth in April. Tomorrow, the BOE is expected to increase the Official Bank Rate from 4.25% to 4.50%, while the US PPI, Core PPI, and Unemployment Claims could really shake the markets.
XAU/USD Downside Needs Confirmation!
Technically, the price action developed a new up channel which is seen as a bearish formation. It has found strong resistance right below the 2,048 historical level and now it has escaped from this pattern again.
The first downside target is represented by the weekly pivot point of 2,020. It remains to see how it reacts around this downside obstacle.
XAU/USD Outlook!
A bearish closure below 2,020 activates more declines and is seen as a new selling opportunity.
