- XAU/USD remains bullish despite temporary retreats.
- The FOMC could bring sharp movements on Wednesday.
- The upper median line (UML) is seen as a major target.
The price of gold climbed as high as $2,009 today, where it found a strong supply. Now, it has turned to the downside and is trading at $1,977 at the time of writing.
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After its amazing growth, a small drop was natural. The yellow metal extended its upwards movement as the US Prelim UoM Consumer Sentiment came in at 63.4 points versus 66.9 points expected on Friday.
Tomorrow, the Canadian inflation data could have a big impact. Still, the FOMC is seen as the week’s most important event. The FED is expected to deliver a 25-bps hike in the March meeting on Wednesday. The FOMC Economic Projections, FOMC Statement, and the FOMC Press Conference should shake the markets.
In addition, the United Kingdom is expected to announce lower inflation in February compared to January. The SNB and BOE are also expected to continue hiking rates at the March meeting.
At the end of the week, the Eurozone, US, and UK manufacturing and services data could change the sentiment and bring sharp movements again.
Gold price technical analysis: Sellers emerge above $2,000
The XAU/USD turned to the downside after registering a false breakout through the channel’s upside line. The 2,000 psychological level was seen as an upside obstacle.
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The rate failed to stay above it, signaling the buyers were exhausted. Still, the bias remains bullish despite the current drop. The price could test the immediate support levels before resuming growth.
The median line (ML) and the uptrend line represent dynamic support levels. As long as it stays above the uptrend line, the bias remains bullish in the short term, and the XAU/USD could extend its upwards movement. Also, staying above the median line (ML) may also announce further growth toward the upper median line (UML).
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