Spot gold is having hassle making new month-to-month highs.
Will the commodity prolong its short-term downtrend?
Right here’s a setup I discovered on the 1-hour timeframe:
Spot gold (XAU/USD) costs began falling in March when main central banks began hinting at aggressive rate of interest hikes.
For newbies on the market, greater rates of interest and bond yields would imply greater alternative prices for these holding non-yielding gold.
XAU/USD paused its long-term downtrend in mid-Might when it ranged between $1,800 and $1,8800 however the decrease highs and decrease lows on the 1-hour chart recommend that the bears are prepared for extra motion.
And it’s not simply the unbroken development line resistance that’s egging on gold bears! As you’ll be able to see, XAU/USD can be buying and selling close to a key assist in mid-June in addition to the 50% Fibonacci retracement of final week’s downswing.
Add within the pull of the 100 and 200 SMA resistance ranges and also you’ve acquired your self a bearish social gathering.
This week’s FOMC assembly minutes and U.S. NFP launch might make or break XAU/USD’s short-term downtrend.
The prospect of upper rates of interest might drag gold costs again all the way down to their July lows.
In the meantime, an anti-dollar development or a wave of threat aversion might bust XAU/USD above its development line resistance and push the commodity nearer to its $1,850 highs.
Watch the subsequent candlesticks carefully for the commodity’s subsequent course!
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