Yesterday, gold price traded higher as risk aversion dominated market sentiment. This was mostly driven by concerns about the relationship between the US and China after US President Trump threatened the latter with more tariffs.
For today, the direction on gold price will likely be dictated by the economic data due from the US. Later at 3:00 pm GMT, the ISM non-manufacturing PMI for April is expected to print at 37.5. A disappointing figure could be bullish for XAUUSD because it could weaken the US dollar. Readings farther below 50.0 indicates worsening industry contractions. On the other hand, a better-than-expected report could push XAUUSD lower on dollar strength.
On the 4-hour time frame, XAUUSD can be seen testing resistance at the falling trendline (from connecting the highs of April 23 and April 30). This price, around $1,700.00, also coincides with the 100 SMA. If resistance at this level holds, gold price could fall to near-term support at $1,671.30. Should this happen, the double top chart pattern on XAUUSD will still be valid and a further break below the trend line could trigger a bigger sell-off. The next support level for the precious metal could be at $1,642.80 where the 200 SMA coincides with the highs of March 26.
On the contrary, a close above the high of May 4 at $1,707.93 would invalidate resistance at the falling trendline. This could suggest that there are still buyers in the market who could possibly push gold price to its April 23 highs at $1,739.00.