Gold extends correction from overbought conditions – $3,310 last hope for bulls?

Gold prices (XAU/USD) are trading $3350, $18 below the previous Day close of $3368. The current price action is influenced by a shift toward risk-on sentiment and a decrease in safe-haven demand as trade deal with Japan cools some of the tariff concerns.

Fundamental analysis

The fundamental outlook for gold is mixed, with several factors influencing its price:

• Risk-on Sentiment: A boost in global equities due to trade deal prospects is pressuring gold prices.
• US Dollar Strength: Dollar Index shows modest recovery from 97 area, causing pressure on Gold prices.

Technical analysis

From a technical standpoint, gold is showing bearish momentum as long as prices face challenge at immediate resistance $3358:

• Resistance Levels: Key resistance levels are at $3365, $3375, and $3385.
• Support Levels: Strong support levels are at $3343, $3335, and $3310.
• RSI: The Relative Strength Index (RSI) reading at 37 on 4 Hour time frame indicates bearish sentiment.

Actionable trading ideas

Buy scenarios

• Buy Zone: $3345-$3343, target $3360-$3370-$3380-$3390.
• Aggressive Long: Buy at $3336-$3331, stop loss below $3308.
• Upward Rebound requires break above $3358 to aim $3368-$3375-$3385.

Sell scenarios

• Sell Below $3375: Targets at $3351, $3341, and $3331.
• Short Positional Swing: Sell at $3388-$3390, stop loss at $3395, target $3380-$3365-$3350-$3340.

Key levels to watch

• Resistance: $3375, $3385, $3396, $3400.
• Support: $3340, $3330, $3310.

Note: Though Gold current price action remains short-term bearish, demand accumulation from value bargain areas may witness consolidated break above immediate resistance zone and further bullish rebound may not be ruled out.