XAU / USD plummets to 3-week lows amid stronger USD and rising bond yields

• Gold witnessed strong selling for the second straight session on Tuesday.
• The stage appears to be set for a pullback towards the reassessment of multi-month lows.

The oro added to the previous day’s losses and witnessed some subsequent selling for the second straight session on Tuesday. The bearish momentum dragged the commodity below the $ 1,690 level, or to fresh three-week lows during the mid-European session.

The US dollar rallied to fresh four-month highs, which, in turn, was seen as a key factor putting pressure on the dollar-denominated commodity. Aside from this, a new rise in US Treasury yields did even more to drive away the inflows of the non-performing yellow metal.

From a technical perspective, the XAU / USD confirmed a bearish breakout through a two-week trading range on Monday. The subsequent weakness below $ 1,700 was seen as a new trigger for bearish traders and further exacerbated the downward pressure surrounding the commodity.

Meanwhile, technical indicators on the daily chart remain deep in bearish territory and support prospects for further weakness. That said, the extremely oversold RSI on the hourly charts warrants some caution before positioning for any further depreciation moves.

However, the XAU / USD remains vulnerable to sliding further towards challenging multi-month lows around the $ 1,677-76 region. Some follow-up selling will set the stage for a drop towards intermediate support near the $ 1,630-25 region en route to $ 1,600.

On the other hand, any attempted recovery above $ 1,700 now could be seen as an opportunity to initiate new bearish positions. This, in turn, should limit the upside near the breakout point of the aforementioned trading range support, now turned into resistance near the $ 1,720 region.

4 hour chart

Technical levels