GOLD sellers retain control whilst below 21-day SMA near $4,650
Gold snaps the previous rebound and returns to the red early Tuesday amid uncertainty over the US-Iran crisis.
The US Dollar finds renewed haven demand on tepid risk tone, inflation fears and Fed rate hike bets.
Gold looks to retest the falling wedge resistance-turned-support at $4,460 for a sustained downtrend.
Gold is back in the red around $4,550 in Asia on Tuesday, having faced rejection once again just shy of the $4,600 mark, as markets digest the latest developments around the conflict between the United States (US) and Iran.
Gold sellers fight back control, following a brief reversal seen in the second half of Monday’s trading.
Despite US President Donald Trump delaying military attacks on Iran, uncertainty prevails on the revised Iranian proposal to end the war, as they contain the same conditions earlier rejected by Trump.
The US President said via a Truth Social post on Monday that the US would be “probably satisfied” if it could reach an agreement with Iran that prevents Tehran from obtaining a nuclear weapon.
Markets refuse to buy into Trump Always Chickens Out” (TACO) trade this time, remaining cautious as safe-haven flows fuel demand for the world’s reserve currency, the US Dollar (USD), yet again.
The resurgent Greenback’s demand acts as a headwind for the USD-denominated Gold price. Additionally, the USD draws support from increased bets for a US Federal Reserve (Fed) interest rate hike by the turn of this year, rendering negative for the non-yielding bullion.
The protracted US-Iran conflict and the extended closure of the Strait of Hormuz have sent Oil prices into an upward spiral, igniting inflation risks and compelling major central banks to consider hiking rates amid heightened economic slowdown concerns.
That being said, the next move in Gold clearly hinges on further updates around the Middle East conflict. In the meantime, if concerns over stagflation risks return to the fore, US Treasury bond yields could resume their uptrend at the expense of the yieldless Gold.
Daily technical analysis
In the daily chart, XAU/USD trades at $4,554.78, keeping a bearish near-term bias as it sits below the medium- and longer-term moving averages while momentum remains soft with the Relative Strength Index (14) around 41. The pair is capped by the 21-day simple moving average (SMA) near $4,650 and the 50-day SMA close to $4,705, suggesting rallies are likely to meet supply while price holds under this cluster of overhead resistance.
On the topside, initial resistance emerges at the 21-day SMA around $4,650, followed by the 50-day SMA near $4,705, a zone that would need to be reclaimed to ease the current downward pressure. On the flip side, the falling wedge resistance-turned-support around $4,460 is the first notable downside cap ahead of the 200-day SMA near $4,358, where buyers could attempt to stem deeper losses if the metal extends its retreat.
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GOLD sellers retain control whilst below 21-day SMA near $4,650
Gold is back in the red around $4,550 in Asia on Tuesday, having faced rejection once again just shy of the $4,600 mark, as markets digest the latest developments around the conflict between the United States (US) and Iran.
Gold sellers fight back control, following a brief reversal seen in the second half of Monday’s trading.
Despite US President Donald Trump delaying military attacks on Iran, uncertainty prevails on the revised Iranian proposal to end the war, as they contain the same conditions earlier rejected by Trump.
The US President said via a Truth Social post on Monday that the US would be “probably satisfied” if it could reach an agreement with Iran that prevents Tehran from obtaining a nuclear weapon.
Markets refuse to buy into Trump Always Chickens Out” (TACO) trade this time, remaining cautious as safe-haven flows fuel demand for the world’s reserve currency, the US Dollar (USD), yet again.
The resurgent Greenback’s demand acts as a headwind for the USD-denominated Gold price. Additionally, the USD draws support from increased bets for a US Federal Reserve (Fed) interest rate hike by the turn of this year, rendering negative for the non-yielding bullion.
The protracted US-Iran conflict and the extended closure of the Strait of Hormuz have sent Oil prices into an upward spiral, igniting inflation risks and compelling major central banks to consider hiking rates amid heightened economic slowdown concerns.
That being said, the next move in Gold clearly hinges on further updates around the Middle East conflict. In the meantime, if concerns over stagflation risks return to the fore, US Treasury bond yields could resume their uptrend at the expense of the yieldless Gold.
Daily technical analysis
In the daily chart, XAU/USD trades at $4,554.78, keeping a bearish near-term bias as it sits below the medium- and longer-term moving averages while momentum remains soft with the Relative Strength Index (14) around 41. The pair is capped by the 21-day simple moving average (SMA) near $4,650 and the 50-day SMA close to $4,705, suggesting rallies are likely to meet supply while price holds under this cluster of overhead resistance.
On the topside, initial resistance emerges at the 21-day SMA around $4,650, followed by the 50-day SMA near $4,705, a zone that would need to be reclaimed to ease the current downward pressure. On the flip side, the falling wedge resistance-turned-support around $4,460 is the first notable downside cap ahead of the 200-day SMA near $4,358, where buyers could attempt to stem deeper losses if the metal extends its retreat.
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