FX.co ★ Gold: imminent breakdown after prelim UoM consumer sentiment

The price of gold dropped again in the last hours as the Dollar Index has managed to rebound. XAU/USD maintains a bearish bias, so more declines are in cards. It was trading at 1,651 at the time of writing.

Fundamentally, the US data came in mixed today. The Retail Sales indicator reported a 0.0% growth less than the 0.2% expected, Core Retail Sales registered a 0.1% growth compared to a 0.1% drop estimated, while the Prelim UoM Consumer Sentiment came in at 59.8 points above 58.7 points forecast.

XAU/USD Bearish Bias Intact!

Technically, the rate tested and retested the downtrend line which represents a dynamic resistance and now it challenges the median line (ml). As you already know from the last analysis, 1,642 stands as critical support.

Also, the median line (ml) stands as a dynamic support. It remains to see how the asset will react to this downside obstacle. Staying above this line may signal that the downside movement could be over.

XAU/USD Forecast!

A new lower low, making a valid breakdown below 1,642 activates a deeper drop and brings new short opportunities.