Gold Price Tumbles After US Inflation, Focus on US PPI

• The downside pressure is high after escaping from the flag pattern.
• The pivot point is seen as a potential target.
• The ECB Press Conference and the US data should move the rate.

The gold price turned to the downside after reaching today’s high of $2,346. The metal is trading at $2,332 at the time of writing. The dollar’s rally boosted the greenback in the last trading session and weighed down the XAU/USD.

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Greenback’s further growth could push the yellow metal lower in the short term. However, don’t forget that the bias is still bullish despite minor corrective downsides.

Yesterday, the XAU/USD registered sharp movements in both directions, as expected after the US inflation data was released. As indicated in the previous analyses, higher US inflation should lift the USD and drag Gold lower.

The CPI announced a 0.4% growth in March, beating the 0.3% growth estimated. CPI y/y registered a 3.5% growth, exceeding the 3.4% growth forecasted, while Core CPI reported a 0.4% growth versus the 0.3% growth expected.

Furthermore, the BOC and RBNZ maintained the monetary policy in the April meeting. Today, the ECB is expected to keep the Main Refinancing Rate at 4.50%.

The ECB Press Conference should shake the markets today. In addition, the US will release the PPI, Core PPI, and Unemployment Claims data.

Gold Price Technical Analysis: Facing Resistance

From the technical point of view, the XAU/USD found resistance at the weekly R1 (2,364), and now it has escaped from the flag pattern, signaling a corrective phase.

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In the short term, it has tried to recover after the last sell-off, but the downside pressure seems high.

Still, only a new lower low, taking out the immediate lows, could activate a larger drop toward the weekly pivot point of 2,296. A valid breakdown through this level validates a downside continuation.

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• Source: https://www.forexcrunch.com/blog/2024/04/11/gold-price-tumbles-after-us-inflation-focus-on-us-ppi/