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  • XAU/USD maintains a bearish bias despite temporary rebounds.
  • A new lower low could activate more declines.
  • False breakdowns through 1,732 may announce a bullish momentum.

The price of gold was traded in the red at $1,735 at the time of writing. The bias remains bearish, so a further drop is favored. XAU/USD invalidated a larger rebound as the Dollar Index seems determined to approach new highs. The USD’s appreciation could force the yellow metal to drop deeper.

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Technically, the price action developed a range pattern. This could represent a distribution before dropping towards new lows. Gold approaches $1,732 key support. It is still to see reaction around this downside obstacle.

As you already know, XAU/USD registered sharp movements before and after the Non-Farm Payrolls. Fundamentally, gold was expected to resume its drop after the US NFP came in at 372K in June versus 260K expected.

In addition, the Unemployment Rate remained at 3.6%, while the Average Hourly Earnings rose by 0.3%, matching expectations. Also, the Canadian economic data came in mixed on Friday. The price of gold registered strong movements during the week. The RBNZ, US inflation data, and the BOC are seen as high-impact events and could really shake the markets.

Gold price technical analysis: Distribution or accumulation?

gold price

From the technical point of view, the XAU/USD is trapped between $1,747 and $1,732. Escaping from this pattern could bring new opportunities. In the short term, gold could extend its sideways movement after registering false breakouts in both directions.

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Now, it challenges the ascending pitchfork’s lower median line (LML), representing dynamic support. After its sell-off, we cannot exclude a temporary rebound. A valid breakdown below the lower median line could also signal a breakdown through the $1,732.

A downside breakout from this range pattern may activate more declines. Still, you must be careful as the rate could register only false breakdowns again. A new lower low, a bearish closure below $1,729, could activate a downside continuation. New false breakdowns below $1,732 could signal a bullish momentum towards $1,747.

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