Fundamental analysis of XAU/USD

Currently, gold prices are showing mixed dynamics amid various global economic indicators and speculation about inflation in the U.S. and its subsequent impact on the decision on the interest rate set by the Federal Reserve. 
 
According to the latest data, gold fell slightly in price, continuing its downtrend, which lasted almost a month. This is happening against the background of the fact that traders are eagerly awaiting the next release of the U.S. consumer price index, which is expected to rise from 3% to 3.3%. Currently, traders' sentiment is mostly suggesting that the Federal Reserve may not raise interest rates at its next meeting in September. Moreover, sentiment is leaning toward a rate cut soon, possibly as early as 2023. Recent comments from Federal Reserve officials, including Patrick Harker and Rafael Bostic, seem to indicate a pause in rate hikes, hinting at the U.S. dollar's ability to limit growth, which could favor gold. If the deflationary trend continues and the US dollar weakens, gold could attract renewed investor interest. At the same time, the US dollar index remains relatively stable and the US 10-year Treasury bond yield at 4.02% could weigh on gold prices. The Fed's potential reaction to this data is in focus. Many investors believe that if inflation falls more than expected, it will highlight the downward trend in inflation, possibly increasing the appeal of gold, which has traditionally been seen as an inflation hedge. However, a possible rise in interest rates could reduce this attractiveness. 
   
On the other hand, the economic condition of China, especially as a major consumer of gold, cannot be ignored. Recent inflation data in China shows a decline, which puts pressure on gold prices, the recent US decree restricting specific investments in China may provide fundamental support for gold in the near future. Upcoming US CPI and PPI data will be crucial in shaping investors' gold strategy. Overall, the trajectory of the XAU/USD pair remains highly uncertain as it could be influenced by numerous global economic indicators and speculative activity. Investors should keep a close eye on new data releases and geopolitical events.
  
Technical analysis and scenarios:

Given the current gold price (XAU/USD) at 1917.50 combined with technical indicators signaling sell-off, we expect bearish momentum for the metal in the coming days. The Alligator indicator indicates that the market is in a downtrend. Since the jaw (blue line) is well above the teeth and lips (green and red lines), this indicates a sustained downward momentum. The Awesome Oscillator (AO) and Accelerator Oscillator (AC) located in the red zone reinforce the bearish sentiment, confirming a sell signal.
Main Scenario (SELL)
Recommended entry level: 1910.00.
Take Profit: 1900.00.
Stop loss: 1915.00.
Alternative scenario (BUY)
Recommended entry level: 1923.00.
Take profit: 1938.00.
Stop loss: 1917.00.