- The bias is bullish despite the recent retreat.
- Taking out the resistance levels and making a new higher high may trigger further rallies.
- The US and Canadian data could change the sentiment.
The gold price is struggling to stay higher after ending its minor correction. The precious metal is trading at $1,923 at the time of writing, below Friday’s high of $1,932. The bias remains bullish in the short term. However, the fundamentals may change the sentiment today.
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Yesterday, the US Empire State Manufacturing Index came in better than expected, while the Canadian Wholesale Sales and Manufacturing Sales were disappointed. Today, the New Zealand Consumer Price Index and the UK Average Earnings Index came in worse than expected, while German and Eurozone ZEW Economic Sentiment beat expectations.
The US and Canadian figures brought some volatility in the early New York session. The US Retail Sales reported a 0.7% growth, Core Retail Sales came in at 0.6% growth.
Furthermore, Canadian CPI numbers remained disappointing. This may provide further room for the US dollar resulting in a mild pressure on the gold prices.
Gold Price Technical Analysis: Overbought
Technically, the XAU/USD challenges the major downtrend line. Staying near this dynamic resistance may announce an imminent breakout. The bias is bullish as long as it stays above the uptrend line.
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Failing to come back to retest, signaled strong upside pressure. After its impressive growth, a retreat was natural. Taking out the downtrend line and making a new higher high validates an upside continuation.
On the contrary, false breakouts through the immediate resistance levels may announce a new sell-off. Still, a new leg down could be announced only by a valid breakdown below the uptrend line.
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