Gold Price Forecast: XAU/USD retreats to $3,620 amid US Dollar strength

• Gold retreats from highs to test $3,620 lows amid US Dollar's strength.
• The US Dollar Index appreciates for the third consecutive day, unfazed by investors' bets on Fed monetary easing.
• XAU/USD is showing signs of topping below $3.670.

Gold failed to find acceptance above the $3,660 area and is trading lower on Thursday, returning to $3,620, as US Dollar appreciates for the third consecutive day, with all eyes on the US Consumer Prices Index release.

XAU/USD is struggling amid generalized US Dollar strength, as investors await the US Consumer Price Index release. Consumer prices are likely to confirm that inflationary pressures remain at moderate levels, paving the way for a Federal Reserve interest rate cut next week.

Technical analysis: XAU/USD might have reached a major top

The technical picture suggests that the pair is ripe for a healthy correction after rallying 10% since mid-August.. Gold's failure to breach the $3,660-3,670 resistance area is giving fresh hope for bears, while the bearish divergence and the sharp decline on the 4-hour RSI complete the potential bearish scenario.

Gold sellers, however, would have to confirm the breach of the $3,620 support area to push the pair lower towards the weekly low, which is also the September 5 high, at  $3.580. Further down, the next target is the September 4 low, at $3,510.

A bullish reaction, on the other hand, will find resistance at the mentioned  $3,660-3,670 area (September 9, 10 highs). Above here, the 261.8% Fibonacci extension of the September 3-4 pullback, at the $3,700 area, seems a plausible target for bulls.