- The price of gold ended its swing higher, and now it seems determined to approach and reach new lows.
- The false breakout through 1,810 indicates downside pressure.
- A larger drop could be activated from below 1,797.
The gold price climbed as high as 1,812 today, where it found a strong supply. Now, it was trading at $1,806 at the time of writing.
Fundamentally, a rebound was somehow expected after the US Pending Home Sales indicator reported a 4.0% drop in the last month versus the 0.9% drop expected and compared to the 4.7% drop in the previous reporting period.
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The XAU/USD could try to jump higher when the US data is negative. The Richmond Manufacturing Index came in at 1 point versus the -10 points estimated.
Later today, the US data could move the markets. The Unemployment Claims are seen as an important event and are expected at 225K in the last week versus 216K in the previous reporting period. Probably, the US Crude Oil Inventories could have an impact on the USD as well. So, the XAU/USD could react around these economic figures.
In addition, tomorrow, the US is to release the Chicago PMI. This could shake the markets in the short term. The indicator is expected to jump from 37.2 points to 40.1 points. Better than expected, US data could be bad for the yellow metal.
Gold price technical analysis: Consolidating above $1,800
From the technical point of view, gold rebounded from $1,797. Now it has found resistance above the $1,810 historical level. The XAU/USD registered only a false breakout through this static resistance signaling that the leg higher could be over. Now, the sellers are in control. The first downside target and obstacle are represented by the weekly pivot point of $1,802. Taking out this support may announce more declines.
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The former low of $1,797 stands as support. So, a larger drop could be activated only after making a valid breakdown below this key obstacle. The yellow metal turned to the downside again as the Williams %R signaled an overbought situation. As long as it stays below the upper median line (UML), XAU/USD could still be attracted by the median line (ML).
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