Home Gold Price Under Massive Selling Pressure After BoC Hike

Gold Price Under Massive Selling Pressure After BoC Hike

  • The bias remains bearish despite temporary rebounds.
  • A new lower low activates more declines.
  • The median line (ML) represents a potential downside target.

The gold price dropped in the last trading session, reaching as low as $1,939. The yellow metal has rebounded a little and is trading at $1,945. However, the downside pressure remains high.

Are you interested in learning more about copy trading platforms? Check our detailed guide-

Gold turned to the downside after the US and Canadian economic data were released yesterday. The US Trade Balance came in at -74.6B, above -75.8B forecasts, while Canadian Trade Balance was reported at 1.9B versus 0.5B estimates.

Still, the BOC had been a high-impacting event after increasing the Overnight Rate from 4.50% to 4.75%, even if the traders expected the rate at 4.50%.

Today, the US Unemployment Claims has been a high-impact event. The economic indicator is expected to be at 236K in the last week versus 232K in the previous reporting period.

In addition, the Final Wholesale Inventories could report a 0.2% drop in April. The Japanese and Eurozone economic data came in mixed.

Tomorrow, the Chinese CPI and PPI could bring some action in the early morning, while the Canadian Unemployment Rate and Employment Change could shake the price in the afternoon.

Gold price technical analysis: Temporary rebound

Gold price hourly chart
Gold price hourly chart

Technically, the gold price slumped after reaching the $1,969 resistance level. It ignored the weekly pivot point of $1,954, representing static support.

Are you interested in learning more about scalping forex brokers? Check our detailed guide-

Then, it was just shy of the former low of $1,938. This represents strong support. Still, after its massive drop, a temporary rebound was expected. The price may try to test the near-term resistance levels before going down.

Technically, minor rebounds could bring us new short opportunities. Also, a new lower low, a bearish close below $1,938, can activate more declines and could represent a new bearish signal.

Failing to reach the descending pitchfork’s upper median line (UML) signaled strong downside pressure. The median line (ML) is seen as a potential downside target if the rate continues to drop.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money

Olimpiu Tuns

Olimpiu Tuns

Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.