- Gold fails to sustain the rebound and marks daily lows at $1,659.
- Bearish pressure continues at the start of a busy week.
Gold started the week in the negative, erasing Friday’s strong rebound and showing that it remains under strong downward pressure. The price of the yellow metal tested $1680 in Asian hours but then changed direction and reached daily lows below $1660. In the previous American session, it is trading around $1,664, close to the lows in years.
XAU/USD fell to $1,653 on Friday, the lowest level since April 2020. From where it bounced giving the bulls some hope, but these did not last long. A return above firm $1675 could ease downside pressures. Then resistances are seen at $1680 and $1695.
The dominant trend is bearish and the XAU/USD appears to be set for lower to continue below the key long-term support of the $1675 area. Below the recent low, the next strong support can be seen at $1640/35.
From the fundamental point of view, gold is affected by rising government bond yields, firmer dollar and risk aversion. Yields advance at the start of a busy week that is expected to see interest rate hikes by the Federal Reserve, the Bank of England and the Swiss National Bank. The Bank of Japan will also decide, but here there is no expectation of a rate hike.
The dollar index rises 0.40% and trades above 110.00, approaching the highs of last week. Futures of the Wall Street indexes operate in negative with falls close to 1%.
Technical levels
Source: Fx Street
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