Gold Price Facing Selling Pressure Amid Higher Dollar Demand

gold and black metal tool

Photo by Jingming Pan on Unsplash

The price of gold is trading at 1,909 at the time of writing. It seems undecided in the short term after ending its temporary drop.

Fundamentally, the yellow metal stayed higher as the US reported poor economic data in the last trading session. The Retails Sales dropped by 1.1% versus the 0.8% drop expected, while Core Retail Sales registered a 1.1% drop as well, even though the traders expected only a 0.5% fall.

In addition, the PPI reported a 0.5% drop compared to the 0.1% drop forecasted, while Core PPI came in line with expectations. Capacity Utilization Rate and Industrial Production came worse than expected as well.

As you already know, the Canadian and UK Consumer Price Index reported lower inflation, while the BOJ left its monetary policy unchanged.

Today, US data could drive the price of gold. The Unemployment Claims could jump from 205K to 214K in the last week, Philly Fed Manufacturing Index could be reported at -10.9 points, and the Building Permits indicator is expected to increase from 1.34M to 1.37M. At the same time, Housing Starts may drop from 1.43M to 1.36M.

The Australian data came in worse than expected today, but it remains to see what the CB Leading Index brings later.


Gold price technical analysis: Sellers’ zone

(Click on image to enlarge)

Gold price

Gold price

From the technical point of view, XAU/USD failed to stay above the broken uptrend line. Now, it has rebounded. It tested and retested the line after finding support on the weekly pivot point of $1,902. The price of gold signals exhausted buyers by stabilizing under the broken dynamic support.

The $1,900 psychological level represents a downside obstacle as well. Testing and retesting the weekly pivot point and the descending pitchfork’s median line (ml) could announce a new upside momentum. On the contrary, dropping and closing below 1,901 today’s low and under the median line (ml) may signal a potential sell-off.

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