Gold is trading in the red at 1,890.25 level after failing to stabilize above 1,900 psychological level. The yellow metal drops also as the US Dollar has managed to appreciate in the short term.
DXY's (USDX) further growth after today's US data could push the price of gold lower. Still, you should know that XAU/USD maintains a bullish outlook despite the current drop. It could start increasing anytime if the DXY drops again.
Technically, the price of gold may only test and retest the near-term support levels before jumping higher. A temporary decline was somehow expected after the last rally.
XAU/USD Natural Drop!Gold plunged in the short term invalidating its breakout through the 1,900 psychological level. The bias will remain bullish as long as the yellow metal stands above the ascending pitchfork's median line (ml).
Now, is in a support zone in the short term, around 1,889.70. Closing below 1,888.31 yesterday's low could indicate a further drop towards the median line (ml).
Gold Outlook!Gold could be a buy again if the rate jumps and closes again above 1,900 psychological level. The upside target is seen at the upper median line (uml) of the ascending pitchfork.
On the other hand, closing below 1,887.97 confirms a deeper decline in the short term towards the median line (ml).