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Gold Price Nosedives But $1,675 Is Still Intact

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Aayush Jindal

Key Highlights

  • Gold price started a major decline after it failed to surpass $1,830.
  • It traded below a major contracting triangle with support near $1,785 on the daily chart.
  • EUR/USD extended its decline below the 1.1740 support zone.
  • The US Consumer Price Index could increase 5.3% in July 2021 (YoY).

Gold Price Technical Analysis

Gold price struggled to clear the $1,830 resistance against the US Dollar. As a result, there was a sharp bearish reaction and the price tumbled below $1,800.

The daily chart of XAU/USD indicates that the price nosedived below a major contracting triangle with support near $1,785. There was a clear break below the $1,750 support zone.

The price even settled below $1,750, 100-day simple moving average (red), and the 200-day simple moving average (green). Finally, there was a spike below the $1,700 support, but the bulls were active above the main $1,675 support.

A low was formed near $1,678 before there was a recovery wave. The price is now struggling to recover above $1,750 and it might resume its decline.

On the downside, the $1,680 and $1,675 levels are important. A close below $1,675 could spark another major decline. The next major support might be $1,620.

Looking at EUR/USD, the pair remained in a bearish zone and it broke the 1.1740 support. Conversely, USD/JPY climbed further above the 110.20 resistance zone.

Economic Releases to Watch Today

  • German Consumer Price Index for July 2021 (YoY) – Forecast +3.8%, versus +3.8% previous.
  • German Consumer Price Index for July 2021 (MoM) – Forecast +0.9%, versus +0.9% previous.
  • US Consumer Price Index for July 2021 (MoM) – Forecast +0.5%, versus +0.9% previous.
  • US Consumer Price Index for July 2021 (YoY) – Forecast +5.3%, versus +5.4% previous.
  • US Consumer Price Index Ex Food & Energy for July 2021 (YoY) – Forecast +4.3%, versus +4.5% previous.
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