Update: Gold added to the previous day’s modest losses and witnessed some follow-through selling for the second consecutive session on Tuesday. The steady decline extended through the first half of the European session and dragged the XAU/USD to over one-week lows, around the $1,768 region in the last hour.
Despite mixed signals on the US inflation, investors have been betting on the prospects for an early move by the Fed to tighten its monetary policy. Apart from this, concerns about the spread of the more contagious Delta strain of the coronavirus acted as a tailwind for the US dollar and weighed on dollar-denominated commodities, including gold.
Gold fades the breakout of the two-week-old falling trend line, portrayed the previous day, amid downbeat MACD signals. Also challenging the gold sellers is the 50-SMA and a descending resistance line from June 18.
That said, the latest bounce could be ignored until staying below the $1,782 resistance line while odds of its battle to a 50-SMA level of $1,780 can’t be ruled out.
It should, however, be noted that a clear break of $1,782 will aim for the $1,800 threshold whereas any further upside will be tamed by the prior support line from June 04, surrounding $1,827.
On the contrary, the immediate resistance-turned-support line near $1,769 holds the key to gold’s fresh downside targeting the monthly low near $1,761.
During the quote’s further weakness past $1,761, March’s top close to $1,755 may test the gold bears before directing them to the mid-April lows near $1,723.
Written by FTG, Author from Investing
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