August 30, 2022 18:18:15
XAU/USD bears took the charge on Tuesday and led the losses toward $1,720. The major theme revolves around the higher interest rate bets from the U.S Federal Reserve that added attractiveness to the greenback.
The non-yielding asset, although considered a hedge against inflation. loses its sheen following the higher interest rates and the opportunity cost.
A stronger dollar makes the yellow metal more expensive for retail traders to hold or trade, dealing in other currencies.
A weak bias remained intact for the gold, as the price remains under pressure below the critical $1,750 mark.
On the daily chart, the XAU/USD pair looks bearish. The bearish slopping line that extends from the highs of $2,070.28 acted as a strong upside barricade for the bulls.
The gold buyers made multiple attempts to breach the descending trend line, On April 18 at $1,998.04 followed by August 10 at $1,807.94. But failed to do so, and as a consequence, the price was drenched into sell-side liquidity.
After falling to fresh yearly lows of $1,680 in July, the spot made a quick recovery, making bulls hopeful for extended recovery. However, there is a supply zone near $1,810-$1,800.
The sellers took no time to take up the opportunity and registered a drop of nearly 90 points since August 11.
The picture is not very optimistic for long-side traders as the 50-day exponential moving average play a critical upside barricade for any immediate recovery.
The MACD slips below the mid-line with a bearish crossover.
A trade below $1,720 on the daily basis would produce more losses. The retesting of July lows of $1,680 could be the next price action or probably further low toward $1,650.
In case, the bears shift their sentiment and the price jumped back to $1,740, we could expect $1,760.
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