- The XAU/USD is in a corrective phase but the retreat could be over soon after reaching the near-term support levels.
- Gold is trading in the red as the DXY rebounded.
- Worse than expected US retail sales figures could boost the yellow metal.
Our gold forecast sees the price of the yellow metal trading in the red at 1,852 at the time of writing. It has slipped lower as the Dollar Index has rebounded. The volatility could be really high later around the Canadian inflation figures and after the US releases its retail sales data.
Most likely, the XAU/USD could register sharp movements in both directions. In the short term, the bias remains bullish, that’s why personally, I’ll search for new long opportunities.
As you already know, the Dollar Index remains under strong downside pressure, some poor US data could force the greenback to depreciate, this scenario could boost the XAU/USD.
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The Canadian Consumer Price Index is expected to report a 0.6% growth after a 0.1% drop in the previous reporting period. In addition, the Core CPI, Trimmed CPI, Median CPI, and the Common CPI will be released as well.
Today, the fundamental factors will drive the rate, the US Retail Sales indicator is expected to register a 2.1% growth in January versus 1.9% drop registered in December, while the Core Retail Sales may report a 1.0% growth in the last month after a 2.3% drop in the previous reporting period.
Industrial Production from the United States may report a 0.4% growth, while the Capacity Utilization Rate could jump from 76.5% to 76.8%.
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Gold Forecast: Price Technical Analysis – Correction
As you can see on the H4 chart, XAU/USD found strong resistance at the ascending pitchfork’s upper median line (uml) and now is in a corrective phase in the short term. The uptrend line, the weekly pivot point of 1,844, and the ascending pitchfork’s median line (ml) are seen as strong downside obstacles.
Technically, we have a confluence area at the intersection between these levels. As long as it stays above these downside obstacles, Gold could give birth to a new leg higher anytime.
Personally, I would like to see a false breakdown with great separation through these levels which could announce a new bullish momentum and could bring new long opportunities.
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