Gold Price At Risk of A Drop Below $1,680
- Gold price is struggling to recover above the $1,735 resistance.
- A key bearish trend line is forming with resistance near $1,725 on the 4-hours chart.
- EUR/USD and GBP/USD are signaling a fresh bearish wave.
- The UK CPI could increase 10.2% in August 2022 (YoY), up from 10.1%.
Gold Price Technical Analysis
Gold price started an upside correction from the $1,688 low against the US Dollar. The price climbed higher above the $1,720 resistance but faced sellers.
The 4-hours chart of XAU/USD indicates that the price attempted a decent recovery wave above the $1,720 resistance level. It even cleared the $1,730 level, but there was no close above the 100 simple moving average (red, 4-hours).
The price traded as high as $1,735 and stayed well below the 200 simple moving average (green, 4-hours). There is also a key bearish trend line forming with resistance near $1,725 on the same chart.
On the downside, an initial support is near the $1,700 level. The next major support is near the $1,688 level, below which the price could accelerate lower. In the stated case, the price may perhaps decline towards the $1,650 level.
On the upside, the price might face sellers near the $1,720 level. The next major resistance is near the $1,735 level. Any more gains might send the price towards the $1,750 level.
Looking at EUR/USD, there was a bearish reaction from the 1.0180 zone. Similarly, GBP/USD declined after it failed to clear 1.1740.
Economic Releases to Watch Today
- UK Consumer Price Index for August 2022 (YoY) – Forecast +10.2%, versus +10.1% previous.
- UK Core Consumer Price Index for August 2022 (YoY) – Forecast +6.3%, versus +6.2% previous.
- US Producer Price Index for August 2022 (MoM) – Forecast -0.1%, versus -0.5% previous.
- US Producer Price Index for August 2022 (YoY) – Forecast +8.8%, versus +9.8% previous.