The gold price climbed as high as $1,937 yesterday. However, it failed to stay near the highs. Now, the precious metal has turned to the downside and is trading at $1,932 at the time of writing.

DXY’s rally forced the USD to take the lead. This situation brought new sellers on the yellow metal.

The Canadian CPI reported higher-than-expected inflation yesterday, while the US data came in mixed. Today, the Chinese 1-y Loan Prime Rate and 5-y Loan Prime Rate came in line with expectations.

Also, the UK inflation data brought some volatility. The Consumer Price Index reported only a 6.7% growth versus the 7.0% growth expected and less compared to the 6.8% growth in the previous reporting period. In addition, the Core CPI came in worse than expected as well.

Tonight, the yellow metal could register sharp movements around the FOMC. The FED is expected to leave the Federal Funds Rate at 5.50%.

Still, the FOMC Economic Projections, FOMC Statement, and FOMC Press Conference should shake the price. Hawkish FOMC could lift the greenback. This situation should send the XAU/USD down again.

Gold Price Technical Analysis: Rally Capped by $1,937

(Click on image to enlarge)

Gold hourly price chart

From the technical point of view, the XAU/USD retreated after failing to stay above the ascending pitchfork’s upper median line and registering only false breakouts through the weekly R1 (1,936).

Now, it has found support on the median line of the ascending pitchfork and tries to return higher. In the short term, the bias remains bullish as long as it stays above this dynamic support.

Only a valid breakdown below activates more declines and brings us new shorts. On the contrary, a new higher high activates further growth ahead.

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