Gold Price Facing Deeper Retracement as Dollar Demand Surges

• The bias remains bearish despite temporary rebounds.
• A new lower low activates more declines.
• The US data could shake the rate today.

The gold price extended its sell-off, reaching the $1,872 level. The precious metal has dropped by 1.65% from yesterday’s high of $1,903. Now, it’s trading at $1,874 at the time of writing.

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The bias remains bearish within the current sideways movement. The dollar’s upside continuation is the primary cause of gold’s softer outlook.

This situation pushed the yellow metal toward new lows. Fundamentally, the XAU/USD took a hit from the US data yesterday. The Core Durable Goods Orders rose by 0.4%, beating the 0.2% growth estimated, while Durable Goods Orders increased by 0.2% even if the specialists expected a 0.5% drop.

Today, the US economic figures and the Fed Chair Powell Speaks could be decisive again. In the short term, the XAU/USD tries to rebound as the DXY retreats a little.

Still, better-than-expected US data could lift the USD again. The Final GDP is expected to report a 2.2% growth versus the 2.1% growth in the previous reporting period.

Furthermore, the Final GDP Price Index, Pending Home Sales, and Unemployment Claims data will also be released.

Gold Price Technical Analysis: Distribution Phase

As you can see on the hourly chart, the gold price ignored the $1,885 historical level, the channel’s downside line, and the descending pitchfork’s lower median line (LML), confirming strong sellers and a downside continuation.

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It moves sideways, right below the downside line and under the lower median line (LML). The current range could represent a downside continuation pattern. A new lower low activates more declines.

The weekly S3 of $1,861 is a potential downside target if the rate continues to drop. Still, staying above the $1,872 low and making a new higher high, returning above the downside line may signal a potential rebound.

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• Source: https://www.forexcrunch.com/gold-price-facing-deeper-retracement-as-dollar-demand-surges/