The price of gold is trading in the red at 1,872 at the time of writing and it seems determined to hit new lows as the USD dominates the currency market after the US inflation publication. You knew from yesterday's analysis that the volatility could be huge today around the US data dump.
As you probably know, the US CPI y/y remained at 3.7% above the 3.6% expected, CPI m/m reported a 0.4% growth compared to the 0.3% growth expected, while Core CPI came in line with expectations. Also, the Unemployment Claims came in better than expected.
XAU/USD Sell-Off!
From the technical point of view, XAU/USD resumed its growth after closing above 1,874 as expected but it has failed to stay above the uptrend line or to reach the R3 of 1,889 signaling exhausted buyers.
Also, its failure to approach and reach the channel's upside line announced an overbought situation. Still, after its strong sell-off, we cannot exclude a temporary rebound as the rate could try to test and retest the immediate resistance levels.
XAU/USD Forecast!
The weekly R2 (1,869) represents a downside obstacle. Dropping and closing below it opens the door for more declines.
