The price of gold climbed to as high as 1,930 today, where it has found strong resistance. By the moment of writing, it crashed and was trading at 1,918 above today's low of 1,912. You knew from my previous analysis that the traders expected high volatility before and after the US inflation figures.
Fundamentally, the CPI and Core CPI came in line with expectations today. Surprisingly or not, the XAU/USD dropped even if the Unemployment Claims and CPI y/y reported worse than expected data. Tomorrow, the US and UK data should bring sharp movements.
XAU/USD upside invalidated
As you can see on the H1 chart, the rate dropped after registering a false breakout through the confluence area formed at the intersection between the downtrend line with the 1,924.
As long as it stays below the downtrend line, the yellow metal could extend its downwards movement.
XAU/USD outlook
The 1,914 former low stands as a key support. Dropping and closing below this level may announce more declines. This scenario brings new selling opportunities with a potential target at the 1,900 psychological level.
