Selling XAU/USD Again As MAs Keep Gold Bearish on Aggressive FED Hikes

Gold has turned quite bearish in recent weeks, as the sentiment remains negative in financial markets while China continues with lockdowns. The price turned bearish by the middle of July after a retrace higher earlier that month which sent the price above $1,800.

But, the USD resumed the bullish trend, which turned Gold lower and today Gold prices briefly slipped below the major $1,700 psychological level for the first time in six weeks, as major central banks stuck to an aggressive stance to combat inflation, dulling demand for non-yielding bullion. The price climbed above that level but we decided to open a sell Gold signal, with the pressure remaining to the downside.

Gold H1 Chart – The 20 SMA Pushing XAU Lower

The downtrend has picked up pace, as indicated by the 20 SMA

Moving averages have turned into resistance at the top during retraces higher, particularly the 20 SMA (gray), which shows that the selling pressure is strong. The US unemployment claims report released just a while ago was positive, so our sell signal in Gold has closed in profit alreay.

“The direction of least resistance looks lower just now for precious metals with the strong dollar continuing to weigh on the market,” said independent analyst Ross Norman. “Expect gold to trade down to test the $1,680 level,” Norman added. So, we decided to go short on Gold again and opened a sell signal below the 20 SMA.

Gold XAU Live Chart