Gold Price Forms New Distribution Pattern, Ahead of US Inflation

• XAU/USD maintains a bearish bias as long as it stays below the upper median line (UML).
• The median line (ml) could attract the price.
• Tomorrow, the US inflation data should bring sharp movements.

The gold price is trading in the red at $1,858 at the time of writing. The bias remains bearish in the short term as the USD remains strong.

–Are you interested to learn more about forex options trading? Check our detailed guide-

As you already know from my analyses, the yellow metal could drop when the US dollar gains. Fundamentally, the XAU/USD signaled a larger downside movement after the US NFP, ISM Services PMI, and the Unemployment Rate came in better than expected on February 3, 2023.

On Friday, the US Dollar received a helping hand from the US Prelim UoM Consumer Sentiment, which came in 66.4 points above the 65.0 points expected. USD’s rally forced the XAU/USD to drop again.

Today, Switzerland’s Consumer Price Index reported a 0.6% growth versus the 0.5% growth expected. Also, the EU Economic Forecasts had an impact on Gold. Still, the US inflation data represents the week’s most important event.

Tomorrow, the US economic figures could shake the markets. The CPI m/m is expected to report a 0.5% growth in January. CPI y/y could drop from 6.5% to 6.2%, while the Core CPI may report a 0.4% growth. Higher inflation should force the XAU/USD to drop as the FED needs to continue hiking the rates in the next monetary policy meetings.

Gold price technical analysis: Bearish bias

Technically, the price retested the descending pitchfork’s upper median line (UML), representing a dynamic resistance. As long as it stays below it, the XAU/USD should approach new lows.

–Are you interested to learn about forex robots? Check our detailed guide-  

The 38.2% ($1,869) and the pivot point of 1,869 represent upside obstacles. The former low of $1,852 stands as the first target. The S1 of $1,848 and the 50% ($1,843) also represent near-term downside targets. Still, as long as it stays under the upper median line (UML), the price could be attracted by the median line (ML) again. From a technical point of view, the median line acts as a magnet.

Looking to trade forex now? Invest at eToro!

67% 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.