- The bias remains bearish as long as it stays below the upper median line (uml).
- The BOE should bring sharp movements.
- The median line (ml) represents a major target.
The gold price is trading at $1,926 at the time of writing, with a solid bearish trend. The bias remains bearish, so more declines are highly probable.
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Greenback’s corrective upside forced the gold to slip from yesterday’s gains. Last day, the United Kingdom reported higher inflation. The CPI came in at 8.7% versus 8.4% estimated, while Core CPI reported a 7.1% growth, exceeding the 6.8% growth forecasted.
Gold turned to the downside again as Fed Chair Powell announced potential new hikes till the end of the year.
Today, the Swiss National Bank increased the SNB Policy Rate from 1.50% to 1.75%, as expected, so the price of gold could slip lower. Further hikes are expected, so XAU/USD could hit new lows in the short term after this announcement.
Later, the Bank of England delivered a 50-bps hike. The Official Bank Rate increased to 5.00% from 4.50%. The MPC members voted by a majority of 7 to 2 for this decision.
Furthermore, the Unemployment Claims could drop from 262K to 261K in the previous reporting period. The current account is expected at -214B. Existing Home Sales may drop to 4.25M from 4.28M. At the same time, the CB Leading Index could report a 0.8% drop.
Poor US data should weaken the USD and could lift the XAU/USD. On the contrary, better-than-expected US data should push the yellow metal toward new lows.
Gold price technical analysis: Bears keeping charge
Technically, the price of gold retested the 50% ($1,935) retracement level, and now it has turned to the downside. Now, it has retested the weekly pivot point of $1,931, signaling more declines.
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The bias is bearish as long as it stays below the upper median line (uml). Testing this dynamic resistance and registering false breakouts may announce a new sell-off.
As long as it stays within the pitchfork’s body, the rate could approach and reach the median line (ml).
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