Gold Price Analysis: XAU/USD bears waiting to pounce

Gold meets a critical resistance area for a compelling case to the downside.
A significant pullback could now be on the cards to correct recent rally.

Ross J Burland FXStreet

The price of gold has shot higher and meets the bearish commitments at a critical juncture in the precious metal's journey.

From a longer-term perspective, the bullish trend is well soiled, however, a significant pullback could now be on the cards to correct the highly overextended W-formation's impulse.

The following is a top-down analysis which illustrates the compelling market structure and where the next trading opportunity could arise to the downside.

Weekly chart

The price is meeting a strong level of resistance which prevented the mid-winter come back and the area would be expected to hold initial tests.

Daily chart

From a daily perspective, the W-formation is highly overextended and is due for a correction.

A correction would be expected to at least complete a 38.2% Fibonacci retracement, although the support structure is much lower down meeting a 61.8% Fibo level.

4-hour chart

With the price still above the current support structure reinforced by the 10 moving average on the 4-hour chart, there is minimal risk to reward opportunities at this juncture.

However, a break of the support would be compelling for a downside move to correct the over extended W-formation's impulse.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

USD/JPY stays below 160.50 as markets assess BoJ decision

USD/JPY fluctuates in a relatively narrow range above 160.00 on Tuesday as markets assess the Bank of Japan's (BoJ) decision to raise the policy rate by 25 at the June meeting. Meanwhile, investors keep a close eye on news coming out of the Middle East, while preparing for the critical Fed meeting.

AUD/USD trades in tight channel near 0.7050 despite hawkish RBA message

AUD/USD trades modestly lower on the day at around 0.7050 on Tuesday as markets adopt a cautious stance amid a lack of details surrounding the US-Iran peace agreement. The Reserve Bank of Australia (RBA) left the door open for possible policy tightening after leaving the interest rate unchanged, as expected, at the June meeting but failed to boost the Australian Dollar.

Gold clings to moderate gains above $4,300 following Monday's rally

Gold maintains a mildly positive tone, holding gains after rallying about 6% over the last few days. The precious metal's recovery, however, has lost steam after crossing the $4,300 line as the initial enthusiasm about the US-Iran peace deal faded, with investors moving to the sidelines in anticipation of details of the agreement and monetary policy decisions by the Fed.

Solana's rebound gains momentum as ETF inflows return

Solana (SOL) steadies at $73 after posting three consecutive green candlesticks since the weekend. The recent recovery is supported by institutional demand, with spot Exchange Traded Funds recording net inflows of $2.81 million on Monday.

BoJ just hiked and US-Iran deal is on the table: Why Japanese Yen is still around 160.00

The Bank of Japan lifted interest rates from 0.75% to 1.00%, its highest level in more than three decades. The landmark move aims to stabilize a sharply weakening Japanese Yen, but by looking at the immediate market reaction, it doesn’t look like it’s going to work.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.