Gold Price Seems Under Clouds Ahead of FOMC Meeting Minutes

• XAU/USD remains bearish after failing to take out the 50% retracement level.
• A new lower low activates a deeper drop.
• The FOMC Meeting Minutes should shake the markets tonight.

The gold price is trading in the red at $1,833. It seems poised to drop deeper as the USD is strongly bullish in the short term.

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Fundamentally, the greenback received a helping hand from the US services and manufacturing data. When the USD appreciates, the price of gold could drop. The Flash Services PMI jumped from 46.8 points to 50.5 points confirming expansion, while Flash Manufacturing PMI came in better than expected as well.

Today, the Reserve Bank of New Zealand had an impact on the yellow metal. The Official Cash rate was increased from 4.25% to 4.75% as expected. Still, the most important event of the day is represented by the FOMC Meetings Minutes. This is seen as a high-impact event and could shake the markets.

The Federal Reserve is expected to continue hiking rates in the next monetary policy meetings. The US reported higher inflation in January, so we cannot exclude a 50-bps hike in March if the inflation grows in February. Dovish FOMC Minutes could lift the price of gold.

Gold price technical analysis: Sellers in control

As you can see on the hourly chart, the rate tested and retested the 50% (1,843) retracement level and the weekly pivot point of $1,844 and now it has turned to the downside. These represented strong static resistance levels.

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Now, it has retested the 150% Fibonacci line of the ascending pitchfork confirming its breakdown. A new lower low activates more declines. As long as it stays under the 50% retracement level, the XAU/USD could approach and reach the 61.8% (1,816) retracement level. A valid breakdown below it activates a larger drop, a potential downside reversal.

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