Gold price is seeing some selling pressure in today’s trading. XAUUSD is down by close to $30 from where it opened, following reports that China’s gold purchases fell in the first quarter of 2020. According to China Gold Association, purchases in the form of gold bars, jewelry, and coins were down by 48.2% compared to Q1 2019.
There is also broad-based dollar strength in the Asian session today which is also driving XAUUSD lower. Only the Consumer Confidence report from the US is due later today with the consensus for April at 88.3. However, tomorrow, the US GDP report and the much-anticipated FOMC meeting are due. Both events could then inspire more volatility on XAUUSD.
On the 4-hour time frame, it can be seen that gold price seems to have gotten rejected around it April 14 highs at $1,737.65. It is currently testing the rising trend line from connecting the lows of April 1 and April 21. Reversal candlesticks around this price could mean that we could soon see XAUUSD retest its recent highs.
However, if support at the trend line does not hold, we could see gold price fall to near-term support at $1,671.87 where the currency pair bottomed on April 21. Should this be the case a double top chart pattern will have already formed. This is widely considered as a bearish reversal indicator and so, a close below what would be its neckline could mean that a bigger sell-off is ahead. The next floor could then be at $1,640.88 where XAUUSD bottomed on April 8.