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Gold : Broke Down Ahead of US Data, Might Try to Surge Again

XAUUSD : 4 Hour Chart

Gold broke down from the ascending triangle trend on the 4 hour chart, showing that the gains are limited. The losses came ahead of the US Retail Sales and PPI data. The commodity was gaining strength because Fed stated that the economic growth in US will drive the timing of interest rate increase and the central bank will keep the market well informed to avoid any market fluctuations.

Gold was following ascending triangle trend but declined from the rising support trend line of the triangle as investors expecting interest rate increase soon. The 50 day SMA has now crossed above the 100 day SMA changing the pattern. If it is able to cross above the 200 day SMA as well, we might see some surge in Gold above the resistance at 1235.09.

XAUUSD : Daily Chart

On the daily chart, the pair declined finding resistance at 1235.60 and most probably will find support at 1204.33. The moving average pattern on the daily chart is still signaling a downtrend continuation. Even if it tries to break above this resistance it will find another resistance from the falling resistance trend line which is preventing the pair in rising further since a long time. However if the commodity continues to decline and again find support at 1189.98, it will form a double bottom pattern according to which it might surge above the resistance at 1235.60.