- A combination of factors limited the early rally in the matter to the region of $ 1,845.
- A good recovery in USD demand put some downward pressure on the metal.
- The technical setup favors bearish traders and supports prospects for further decline.
The oro it balanced between tepid gains and minor losses during the early days of the US session and consolidated the overnight slide to lows of more than two weeks.
The underlying bullish sentiment weighed on the safe haven XAU / USD and kept the initial rally to the $ 1,845 region small. Other than this, a modest rally in US Treasury yields triggered some selling around the unprofitable yellow metal.
This, together with the resurgence in demand for US dollars, put some additional pressure on the dollar-denominated commodity. The USD held firm after the release of a better than expected ADP report on US private sector employment.
Meanwhile, the recent rejection drop from the $ 1,875-76 supply zone dragged the yellow metal below a short-term rising trend line support on Tuesday. This, in turn, could have set the stage for a further short-term depreciation move.
The negative outlook is reinforced by bearish technical indicators on the hourly / daily charts. A subsequent drop below the overnight lows, around the $ 1,830 region, will reassert the bearish bias and trigger some technical selling.
XAU / USD could accelerate the decline towards intermediate support near the $ 1,818-17 region. Momentum to the downside could extend further and allow bears to point back to challenge the 2021 lows around $ 1,800.
On the other hand, the recovery attempt could now face strong resistance near the horizontal zone of $ 1,853-54. Any further positive movement now would be seen as a selling opportunity and risks disappearing near the $ 1,870-75 congestion zone.
4 hour chart
Technical levels
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