Last week, the US CPI exceeded expectations with a reading of 5.0%, resulting in a weaker US dollar (USD) at the beginning of the week.

However, this trend was reversed after FED officials announced the possibility of another interest rate hike, leading to a rise in the USD and yields. Consequently, the metals market experienced short-term bearish pressure, with gold currently undergoing a corrective setback.

Based on Elliott wave analysis on the 4-hour timeframe, the gold price has completed five waves up, which were followed by a wedge pattern and a reversal down after the fifth wave. The trendline support was subsequently broken, indicating the start of a correction. This correction is expected to occur in three waves, either in the form of a sharp dip or a sideways correction for a flat. In either case, the A-B-C subwaves are needed before the market can resume higher. According to swing support and Fibonacci level, the ideal zone for a bounce is at $1934.

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