Gold Dips to One-Week Low, Falling Below $2,340

 

Gold price falls over 2% to under $2,340 in one day. Less tension in politics makes XAU/USD go down, while strong US Treasury bond yields hurt the pair.

Gold Analysis: Rectangle Formation Signals Bullish Consolidation, But Caution Persists Below $2,400 Level

• Technically, the training range movement noticed over the past week or so constitutes the formation of a rectangle on short-term charts. Meanwhile, the recent blowout rally suggests that this may still be considered a bullish consolidation phase. In addition, oscillatraders reading the chart might observe that oscillators on the daily chart have pulled back from extreme overbought conditions and are now positioned comfortably in the neutral zone. This could make trading relatively long in oil the path of least resistance for oil. However, researchers might prefer to wait for a strong and lasting breach of the $2,400 level before initiating a long position on the oil trend. The level contains short-term highs. On the other hand, a move beneath the $2,364-2,363 region is more likely to trigger a small round of profit-taking. A break below the levels could take us back into the $2,332-2,323 area. A move to this low of gold chart may also bring us to test the $2,300 figure. 

Fundamental Overview

• The previous price of gold in US dollars continues to decrease steadily during the early part of the European trading session on Monday and reaches a low point for the week, hovering around the $2,350 mark in the past hour. Investor confidence is boosted by the belief that tensions between Iran and Israel will not escalate further, leading to a positive sentiment in the stock markets. Additionally, the expectation that the Federal Reserve will postpone lowering interest rates due to persistent inflation supports the recent strong performance of the US Dollar. As a result, there is a significant shift of funds away from gold, a traditional safe-haven asset.
• The Gold price may face some challenges, but the impact is reduced as investors anticipate central banks lowering interest rates this year. Traders are also holding back from making big bets against the market before the release of key global PMI data and important US economic reports this week. It's best to be cautious before declaring that the XAU/USD has reached its peak in the short term and preparing for a potential decline.