Gold Price Correction Forms a Bullish Flag, Eying $2,200

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  • The bias remains bullish despite the current sell-off.
  • Taking out the downtrend line activates a new bullish movement.
  • The US data could bring some action tomorrow.

The gold price is trading in the green at $2,171 at the time of writing. The precious looks stubborn enough to post a fresh top above $2,200.

In the short term, gold has retreated a little after hitting a new all-time high of 2,222. The XAU/USD also dropped as the greenback saw a whopping comeback on Friday. The yellow metal turned to the downside after the FOMC Press Conference.

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However, the bias remains bullish in the medium to long term despite the current jitters.

Today, the US New Home Sales could jump from 661K to 675K. This scenario should lift the greenback. Poor US data could send the price of gold higher.

Tomorrow, the US data could really shake the markets. The CB Consumer Confidence is expected to jump from 106.7 to 106.9. Durable Goods Orders may announce a 1.2% growth, while Core Durable Goods Orders could report a 0.4% growth.

In addition, the S&P/CS Composite-20 HPI, HPI, and the Richmond Manufacturing Index data should be released as well. Positive US figures should help the greenback.

Gold Price Technical Analysis: Down Channel

Gold price
Gold 1-hour chart

As you can see on the hourly chart, the XAU/USD extended its growth after escaping from the falling wedge pattern. Now, the metal has dropped slightly, forming a flag formation, which is a bullish continuation pattern.

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The price challenges the downtrend line, which stands as a dynamic resistance. Taking out this obstacle may confirm that the retreat ended and that the price could come back higher.

On the contrary, a false breakout through this dynamic obstacle indicates a deeper drop towards the $2,146-49 support zone.

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