• The XAU/USD is bearish if it stays within the down-channel pattern.
  • Taking out the 61.8% activates more declines.
  • The US data should move the rate later today.

The gold price dropped as low as $1,817 yesterday, where it found demand again. Now, it’s trading at $1,825 and is fighting hard to rebound.

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Still, the downside pressure remains high as the USD remains bullish. Fundamentally, the yellow metal tried to come back higher after the US Prelim GDP reported only a 2.7% growth versus the 2.9% growth expected compared to the 2.9% growth in the previous reporting period. Still, the Prelim GDP Price Index and Unemployment Claims came in better than expected.

Today, gold reacted little after the BoJ Gov-Designated Ueda Spoke. Though, the US data could bring some action later today. The Core PCE Price Index is expected to report 0.4% growth. Revised UoM Consumer Sentiment could remain steady at 66.4 points, while New Home Sales are expected at 620K above 616K in the previous reporting period.

In addition, Personal Income may report a 1.0% growth, while Personal Spending is expected to register a 1.4% growth. Positive US economic data should boost the USD. This scenario forces the XAU/USD to drop again.

Gold price technical analysis: Down channel

Gold price

Technically, the XAU/USD found support on the weekly S1 at $1,817 and on the $1,818 former low. It has tried to rebound, but the downside pressure remains high. The downtrend line stands as a dynamic resistance. Failing to approach and reach it signals strong sellers and indicates more declines. The 61.8% (1,816) represents a major downside target and obstacle.

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Staying above it, the price of gold could develop a larger rebound. Still, a valid breakdown below activates a downside reversal and brings new short opportunities.

The channel’s downside line could be used as a downside target if the rate continues to drop. Only staying above the 61.8% retracement level and making a valid breakout through the downtrend line may announce a new swing higher.

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Source: https://www.forexcrunch.com/gold-price-struggling-to-gain-ahead-of-us-core-pce-price-index/