- The current range is seen as a downside continuation pattern.
- Taking out the former low activates more declines.
- The 61.8% represents a major target.
The gold price continued to fall and reached $1,915, well below yesterday’s high of $1,930. The US dollar bounced back resulting in a selling pressure on the XAUUSD.
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But the gold may not drop much further, as it is near some strong support levels. On the other hand, there is some economic data that could move the gold price.
Today, we saw some mixed data from the UK and Germany. The UK reported lower than expected unemployment claims, higher than expected wage growth, but also higher than expected unemployment rate.
Germany reported better than expected economic sentiment, but worse than expected overall sentiment. The market is now waiting for the US inflation data, which could be the key factor for the gold price.
The market expects higher inflation in August than in July, both on a monthly and yearly basis. Higher inflation could boost the demand for gold as a hedge against currency devaluation. But if the US reports higher inflation, the US dollar could also strengthen and weigh on the gold price.
So, it is a tricky situation for the gold traders. Tomorrow, we will also see the UK GDP data, which could also have an impact on the gold price. Stay tuned for more updates and analysis on gold.
Gold price technical analysis: Testing key support
The gold plunged after failing to break above the 1,929 resistance and the 38.2% Fibonacci level at $1,927. It fell below the 50% Fibonacci level at $1,919 and is now testing the $1,915 support, which was a previous low.
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This level could hold the price up. But if the price breaks below it, it could signal more losses. The next target is the 61.8% Fibonacci level at $1,911, which is a key support level. The current range between $1,915 and $1,929 could be a sign of a downtrend continuation.
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