Gold on a Bearish Run – Why Could $1,754 Drive Sell-off

Following a monthly high of $1,807.96, the gold price has fallen for five trading days. In August, the precious gold fell below $1,750.00 for the first time. It is anticipated to settle below the previously indicated crucial level as investors significantly reduce their long positions in gold assets in anticipation of aggressive Fed direction (Fed).

Observing contradictory statements from the Fed minutes on policy direction had previously exhausted the gold surge. St. Louis Fed President James Bullard advocated for another 75 basis point (bps) rate rise to achieve price stability sooner. At the same time, a few Fed members have issued comments about delaying interest rate hikes to protect their economy from future inflation concerns.

Geopolitical concerns are also weighing heavily on gold XAU/USD prices, with Chinese President Xi Jinping and Russian President Vladimir Putin confirming their attendance at the G20 conference in November. This might rekindle Moscow’s humanity offensive in Ukraine.

On the front of the economic indicator, investors are anticipating the publication of US Durable Goods Orders data, which is predicted to fall to 0.6% from 2%. However, when the US economy has previously shown an unaltered core Consumer Price Index (CPI), a drop in economic data is not beneficial to the US dollar index (DXY).

Gold Technical Outlook

After finishing Friday’s trading below the 1755.70 level, the gold price verified breaking through it, adding additional proof to the continuance of the negative bias in the coming sessions, reminding you that our next target is situated below 1726.60.

The 50 EMA continues to support the indicated bearish wave, noting that breaking the targeted level will cause the market to return to the negative track in the short and medium range while breaching 1755.70 marks the initial key to begin recovery attempts that initially target 1779.25 regions. Today’s trading range is likely between 1726.00 support and 1760.00 resistance.

Today’s projected trend is bearish.