- The yellow metal ended the downside movement.
- Taking out the static resistance activates further growth.
- Temporary retreats could bring us new longs.
The gold price edged higher during the earlier London session. The metal is trading at $1,903 at the time of writing.
The dollar’s downside correction helped the XAU/USD buyers to take the lead. After its strong downside movement, the gold was largely expected to post some recovery.
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The greenback’s significant drop should force the yellow metal to develop a strong swing higher. Yesterday, the Chinese 1-y Loan Prime Rate and 5-y Loan Prime Rate came in better than expected.
Today, the US will release the Existing Home Sales indicator, which could drop from 4.16M to 4.15M. The Richmond Manufacturing Index data is also due today.
Furthermore, the FOMC Member Goolsbee and FOMC Member Bowman’s speeches should bring volatility to the market.
The fundamentals should move the price tomorrow, as the PMI data of manufacturing and services represent high-impact events.
The German, UK, Eurozone, and US manufacturing sectors could remain deep in the contraction territory, while the services sectors could announce a slowdown in expansion. The Flash Manufacturing PMI and Flash Services PMI could be decisive tomorrow.
Gold Price Technical Analysis: New Leg Higher
From the technical point of view, the XAU/USD escaped from the major Falling Wedge pattern and posted a rally.
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It has found strong support on the $1,885, signaling that the sell-off ended and buyers could take it higher. It has taken out the weekly pivot point of $1,896, representing an upside target.
It has reached the static resistance of $1,903. After such an impressive rebound, we cannot exclude a minor retreat, as the price needs to accumulate more bullish energy before jumping higher.
Taking out this static resistance opens the door for larger growth in the short term. Minor retreats could bring us new long opportunities.
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