Gold is off its early lows today in a bounce to $4,080 levels now, with the low earlier touching $4,024. It’s a slippery slope for gold now after the technical breakdown since Friday.
The precious metal is seeing price not only fall below the 200-day moving average (blue line) for the first time since October 2023, yesterday also saw a break below the March low of $4,099.
Gold (XAU/USD) daily chart
For dip buyers, it will be important to try and get back above the March low to try and invalidate the break lower yesterday.
However, the backdrop remains tough as the US-Iran conflict continues to drag on while more hawkish Fed expectations continue to be baked in.
Even if Trump looks to be back to playing the whole “I will bomb Iran but actually I won’t” game, it is essentially a sign that we’re just running around in circles with regards to the conflict. All the while the Strait of Hormuz remains closed.
The general risk mood is looking better so far today but it is still early. S&P 500 futures are back up by 0.4% but it was an ugly showing yesterday and the index is still poised for back-to-back weekly losses for the first time since March. That unless the SpaceX IPO can do something to save the market by the end of the week.
As for gold, the bias remains more bearish now until there is a material shift to the fundamental backdrop. As mentioned yesterday, the $4,000 mark will be up next on a break of the March low. After which, we could see a quick drop back towards $3,300 to $3,500 before any real dip buying comes back in.
SOURCE LINK : Gold sees light bounce but still holds below March low after break lower yesterday
