The price of gold crashed in the short term, reaching the 1,907 level. Now, it has rebounded and is located at 1,913 at the time of writing. The bias remains bearish, so more declines are natural.
XAU/USD dropped as the US Dollar appreciated versus its rivals as the US is expected to report higher inflation in August. Tomorrow, the CPI may report a 0.6% growth versus only a 0.2% growth in July, while CPI y/y could increase by 3.6% exceeding the 3.2% in the previous reporting period.
XAU/USD Bearish Pattern Activated!
From the technical point of view, the price dropped below the range's support of 1,915 and under the lower median line (LML). These represented key downside obstacles, so more declines are in the cards.
Now, it has increased a little trying to retest the 1,915 resistance (support turned into resistance). Testing and retesting the broken levels validates the breakdown and announces a new sell-off.
XAU/USD Outlook!
A new lower low, a bearish closure below the S1 (1,907) activates more declines. This is seen as a selling opportunity.
