At the beginning of the week, GOLD is trading sharply bearish, after retreating from a 14-month peak hit in the previous session. Most of the bearish trend is triggered as the greenback held near multi-week highs on robust US retail sales data, before the US Federal Reserve meeting this week.
The risk sentiment is turning bearish for gold as prices broke through the critical support level of 1,342. The short setback was expected ahead of Fed policy rate to encash the pre-news profits.
What’s expected from FED?
Forecasts of an interest rate cut at the Fed’s June 18-19 meeting declined to 21.7% from 28.3% last week, in the wake of the robust retail data. However, bets for monetary easing at the July meeting remain high at 85%.
Gold – XAU/USD – Technical Outlook
On the daily chart, gold closed a doji candle right next to a sharp bullish trend, suggesting bearish bias. Gold is facing immediate resistance at the double top level of 1,347. While support is likely to be found at 38.2% Fibo level of around 1,326.
Both the 20 and 50 Periods EMA await around 1,307 and 1,295 respectively, suggesting gold has an opportunity to stay bearish until these levels.
Gold – Trading Signal
I’m staying bearish on gold below 1335.485 to target 1332.485. In case you are looking to hold more, 1,316 can be an excellent level to close selling.