• XAU/USD escaped from the flag pattern, signaling more declines.
• A new lower low activates a larger correction.
• The US data could bring sharp movements today.

The gold price is trading in the red at $2,316 at the time of writing. The metal looks poised to approach new lows in the short term.

The price tried to return higher after the last sell-off. However, the downside pressure remains high. Hence, there is a probability of a deeper drop in cards.

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The XAU/USD slipped lower after the Australian Retail Sales reported a 0.4% drop against the expected 0.2% growth. At the same time, Private Sector Credit rose by 0.3%, less compared to the 0.4% growth estimated.

In addition, the Chinese Manufacturing PMI and Non-Manufacturing PMI indicators also reported poor data. The sellers are strong also after the Eurozone released mixed data today. The CPI Flash Estimate rose by 2.4%, matching expectations.

Core CPI Flash Estimate reported a 2.7% growth, exceeding the 2.6% growth forecasted, while Prelim Flash GDP came in better than expected.

Later, the Canadian GDP is expected to report a 0.3% growth in February after a 0.6% growth in January. Also, the US will release the CB Consumer Confidence, Chicago PMI, HPI, Employment Cost Index, and S&P/CS Composite-20 HPI data. Positive economic figures should lift the greenback, so the yellow metal could hit new lows.

Technically, the XAU/USD ended its temporary rebound and is now under intense selling pressure. As you can see on the hourly chart, the resistance is right below the descending pitchfork’s median line.

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It has escaped from the up channel (flag pattern), confirming a potential downside continuation. The lower median line (lml) and the weekly S1 2,288 represent potential downside targets. A new lower low could activate more declines.

https://www.forexcrunch.com/blog/2024/04/30/gold-price-turns-bearish-as-fomc-meeting-looms/