FX.co ★ Gold aims at 1,676 as major target

The price of Gold changed little in the short term. It was trading at 1,705 at the time of writing. The bias remains bearish despite temporary rebounds or ranges. In the short term, the XAU/USD could try to test and retest the immediate resistance levels before dropping deeper. It could try to rebound only because the USD depreciates.

Surprisingly or not, the USD is trading in the red, even though the US Retail Sales, Core Retail Sales, and Prelim UoM Consumer Sentiment reported better than expected data. It seems that the DXY was overbought, and a temporary drop was expected, XAU/USD took advantage of this situation.

Fundamentally, the price of gold remains bearish as the FED is expected to hike rates again in the July meeting after the US reported higher than expected inflation in June.

XAU/USD Accumulates More Bearish Energy!

Technically, XAU/USD dropped below the former lows signaling more declines. As long as it stays under the downtrend line, Gold could approach and reach new lows. 1,697 stands as static support.

The downtrend line represents a dynamic resistance. Gold was expected to drop after escaping from the distribution pattern (range) between the 1,732 and 1,747 levels.

XAU/USD Outlook!

The bias is bearish as long as it stays below the 1,707 and under the downtrend line. A new lower low, a valid breakdown below 1,697 could activate more declines towards the 1,676 key downside level. This scenario could bring fresh short opportunities.