Gold Spot / U.S. Dollar
Short
Updated

Gold Crashing After Hot U.S. Data – More Pain Ahead?

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Minutes ago, important indices were released from the US, which catalyzed the continuation of gold's downward trend.

Key U.S. Economic Data Just Dropped!

ADP Employment: 104K

GDP q/q: 3.0%

Both came in stronger than expected, signaling that the U.S. economy is holding up better than many thought!

Strong job growth

Solid economic expansion


The result? A stronger U.S. dollar(DXY) and potential downward pressure on Gold.

All eyes are now on FOMC meeting.

Will the Fed still hint at future rate cuts despite the solid data? Or is the easing cycle officially on hold? What is your idea!?
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Gold(XAUUSD) has already managed to break the Support zone($3,350-$3,326), Monthly Pivot Point, 50_EMA(Daily), Support lines, and the lower line of the ascending channel. Also, Gold trading below $3,333 plays an important role for me, which can increase the possibility of a continuation of the downtrend.

I expect Gold to drop to at least the Potential Reversal Zone(PRZ)[$3,285-$3,272] before the FOMO meeting and if the Support zone($3,307-$3,272) is broken, we can expect further declines to $3,253(Second Target).
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Information we need to know:

How should the Federal Funds Rate be announced to cause a deeper drop in Gold?

The Fed needs to take a hawkish stance — meaning:

They keep rates unchanged, but make it clear they intend to keep them elevated for a prolonged period.

They emphasize strong economic data like today's solid ADP and GDP numbers.

They express concern that inflationary risks remain, and cutting rates isn’t on the table anytime soon.


In this case, markets get disappointed, rate cut hopes fade, and gold drops as real yields(US10Y) rise and the U.S. dollar strengthens.
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Note: Stop Loss (SL) = $3,340

Gold Analyze (XAUUSD), 4-hour time frame.

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You could even use Potential Reversal Zone(PRZ)[$3,285-$3,272] for long positions and #gold returns.

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