XAU/USD outlook: Gold remains at the back foot on fragile geopolitical situation

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold holds in red for the second consecutive day on Wednesday and pressure the floor of seven-day range ($4453), also moving into lower part of short-term bear-channel (off $4889, mid-Apr peak).

Fading hopes of a peace deal in the Middle East revive inflation concerns and hawkishness in the interest rate outlook that adds pressure on the yellow metal.

Weakening structure on daily chart (the price remains under daily cloud for almost two weeks / negative momentum studies / DMAs in bearish configuration) keeps the downside at increased risk.

Eventual sustained break of pivotal $4500 support zone (after a multiple rejections) would generate bearish continuation signal and expose next key supports at $4401 (Fibo 61.8% of $4099/$4889 upleg); $4388 (200DMA) and $4367 (bear channel support line), violation of which would accelerate short-term downtrend.

Res: 4494; 4535; 4585; 4594.

Sup: 4401; 4388; 4367; 4300.

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.

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