The price of gold edged higher in the last hours and was trading at 1,959 at the time of writing, far above today's low of 1,925. DXY's massive drop weakened the USD and attracted more buyers to the XAU/USD.
Fundamentally, Gold ended higher after the ECB increased the Main Refinancing Rate from 3.75% to 4.00% as expected, and after the US reported mixed data. The Retail Sales, Empire State Manufacturing Index came in better than expected, while Core Retail Sales came in line with expectations. On the other hand, the Unemployment Claims, Industrial Production, Capacity Utilization Rate, and Philly Fed Manufacturing PMI came in worse than expected.
XAU/USD downside seems over
Technically, the price of gold dropped below the 1,940 range's support, but the fundamentals pushed the rate higher again. The upper median line (UML) represents a major dynamic resistance.
Still, after the amazing rally, a sell-off could be expected. The rate could come back towards 1,940.
XAU/USD forecast
False breakouts above the upper median line (UML) could bring new selling opportunities. Also coming back below 1,940 and making a new lower low activates a larger drop. Only a valid breakout above the upper median line and through 1,970 brings an upside reversal and good long opportunities.
