XAU/USD outlook: Gold extends weakness as dollar rises ahead of Fed

Slobodan Drvenica Windsor Brokers

Gold

Spot gold accelerated further down, losing 1% in Asia / early Europe trading on Monday and adding to Friday’s 1.1% drop.

Stronger dollar keeps the metal under pressure as investors turn focus to Fed’s policy meeting later this week.

The market sees recent spikes in inflation as temporary action that reduced demand for the yellow metal, used as a hedge against inflation, but slight optimism that the policymakers may start talks about tapering and possibly hint changes in the monetary policy due to improved economic conditions, could further inflate the greenback.

Fresh bears cracked important support at $1855 (June 4 trough), break of which would complete a failure swing pattern on daily chart and signal further weakness.

Extension of pullback from $1916 (June 1 peak) would face pivotal supports at $1840 (200DMA) and $1825 (Fibo 38.2% of $1677/$1916 upleg) with break here to confirm reversal.

Rising bearish momentum and south-heading RSI / stochastic on daily chart, support near-term action. Upticks need to hold below $1877 (bull-trendline off $1855 higher low) to keep fresh bears in play.

Res: 1866; 1877; 1883; 1888.
Sup: 1855; 1840; 1825; 1815.

Interested in XAU/USD technicals? Check out the key levels

1. R3 1924.12
2. R2 1913.57
3. R1 1895.58
PP 1885.03
1. S1 1867.04
2. S2 1856.49
3. S3 1838.5

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.