Time to Turn Bearish on Gold (XAU) As It Heads to $1,700 Again? - Forex News by FX Leaders
Gold continues to lose its shine

Time to Turn Bearish on Gold (XAU) As It Heads to $1,700 Again?

Posted Friday, August 19, 2022 by
Skerdian Meta • 1 min read

GOLD jumped higher early in March as the conflict in Ukraine escalated, pushing above the major level at $2,000. But since then XAU has been on a bearish trend, as it turned from a safe haven into a risk asset for several months. Moving averages were acting as support on the weekly chart, during pullbacks lower, but after the price fell below those moving averages they turned into resistance.

This week we are seeing a bearish reversal after the rejection at the 100 weekly SMA (green), which followed a bounce higher off the major support zone at around $1,700.  In global markets, the precious metal inched higher from recent lows as the dollar and Treasury yields pulled back slightly after US Federal Reserve minutes hinted policymakers may be less aggressive on future rate hikes. But, the FOMC minutes on Wednesday which didn’t have any hawkish comments in them, didn’t help the situation and Gold has turned bearish this week.

Gold Weekly Chart – MAs Turning Into Resistance

The 100 SMA rejected the price

Spot Gold lost ground for a fourth consecutive yesterday, trading at fresh weekly lows at around $1,755.50 a troy ounce. The bright metal is also suffering from renewed dollar strength, as US macroeconomic data suggest the economy remains resilient to the latest global woes, leaving room for the US Federal Reserve to maintain its aggressive stance.

Nevertheless, the latest US figures hint at a much better situation than initially feared. Inflation has finally begun easing while the employment sector remains solid. Additionally, other indicators related to business activity have surprised to the upside. So, the situation is looking increasingly bearish for Gold, and there’s plenty of room until $1,700 or lower. So, we are keeping a bearish bias and will sell the retraces higher in XAU on smaller term charts.

Gold XAU Live Chart

GOLD
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