- Gold extended the previous day’s rejection slide from the $ 1875-76 supply zone.
- The break below the two-week rising trend line sets the stage for a further decline.
- The metal now appears vulnerable to falling below the intermediate support at $ 1,830.
The oro it continued to lose ground during the middle of the European session and fell to a three-day lows around the $ 1,840-39 region in the last hour.
Against the background of market optimism, a sudden spike in demand for US dollars put additional downward pressure on the dollar-denominated commodity. The latest leg to the downside dragged the XAU / USD below a two-week-old rising trend line support.
Given the failure to break out of the $ 1875-76 zone, the collapse could have set the stage for further weakness. The negative outlook is reinforced by the fact that the oscillators on the 4 hour / day charts have only just started to move into bearish territory.
Therefore, a further fall towards intermediate support, around the horizontal zone of $ 1,830, seems like a clear possibility. The downward trajectory could extend further to challenge January’s monthly lows of around $ 1,800.
On the other hand, the $ 1,857-60 region now acts as immediate resistance. Any further positive movement could continue to meet new supply and remain capped near the $ 1,875-76 bid zone. Only a sustained advance will negate the short-term bearish bias.
The XAU / USD could then aim to rebound the $ 1,900 level and appreciate towards the $ 1,922-24 resistance zone. Some subsequent purchases have the potential to further lift the product towards the next big hurdle near the $ 1,960 region.
4 hour chart