The price of gold turned to the upside again as the USD depreciated. DXY's deeper drop should bring more buyers to the yellow metal. Technically, XAU/USD seems undecided as the traders are waiting for the FOMC before taking action.
Gold's rebound was natural after the US reported lower inflation in May compared to the previous reporting period. Today, the US PPI disappointed as well. Still, the most important event is represented by the FOMC. The Fed is expected to leave the monetary policy unchanged.
XAU/USD Temporary Rebound?
Technically, XAU/USD dropped again after retesting the descending pitchfork's upper median line (UML). In the short term, it's trapped between 1,970 and 1,940 levels. Only escaping from this pattern should bring us a clear direction.
After yesterday's sell-off, a rebound is natural. The upper median line (UML) represents a dynamic resistance. The FOMC should bring sharp movements in both directions later.
XAU/USD Outlook!
A valid breakout above the UML and most important above 1,970 represents a buying signal.
On the contrary, a new lower low, a valid breakdown below 1,940 activates a downside movement.
