FX.co ★ Retired-Mogambo | XAU/USD, GOLD

After reaching a lower support level around $4,000 last week, gold (XAUUSD) recovered on Monday. Due to the strength of the US dollar and US Treasury yields, gold and silver (XAGUSD) prices are still in a short-term bearish trend despite this rally. Last week, the U.S. Dollar Index broke over the crucial barrier of 100.50 and consolidated above it in anticipation of more gains. The U.S. Dollar Index's immediate resistance level is still 102. This suggests that there may be more short-term pressure on the price of gold and silver. A good price action is indicated when the US dollar index forms a double bottom pattern and subsequently breaks above 100.50. The U.S. Treasury yield, on the other hand, continues to rise and stabilizes at 4.45% above the 50-day SMA. U.S. Treasury yields will probably rise to 4.70% if the support level is maintained. In the short run, this might keep the price of gold and silver under pressure. The hawkish Fed is to blame for the strength of the US dollar and US Treasury yields. Because of the increase in inflation figures, traders are pricing in tighter monetary policy. Technically speaking, the spot gold has been holding steady within the $4,000–$5,000 wedge pattern. However, a break below $4,500 has opened the door for further decline in the gold price and keeps the market within the bearish trend. At the lower end of this wedge, at $4,000, the prices are already rising. The wedge support line at $3,950 continues to be the next level of support in the spot gold market. Further declines in the spot gold market will be possible if it breaks below $3,950. A break above $4,500, however, will signal additional gains in the direction of $5,000. Another graphic that illustrates how the price is compressing near the triangle's edge also highlights the significance of the $4,000 mark. As a result, a break below $3,950 might signal a significant decline. The spot gold 4-hour chart likewise displays negative price movement below the red highlight at $4,350. The spot gold market has been under bearish pressure due to an inability to break over $4,350. As a result, a break below $4,000 will allow for additional short-term declines. Following the signing of a memorandum of understanding between the United States and Iran on June 23, which will reopen the Hormuz Strait and ease earlier restrictions on oil delivery, gold and silver were trading somewhat more quietly. Long-term supports for both metals can counteract any short-term drop in demand for risk-driven safe havens. In order to reduce exposure to conventional currencies and debt instruments, central banks continue to make sizable net purchases as part of the reserve diversification of developing market central banks. Production of gold and silver is still low compared to historical peaks, while industrial fabrication usage of solar, electronics, and semiconductors is still high for silver. After a significant drop from $4,364, the peak of the swing low, gold spot is around $4,130 on the 2-hour chart, with bearish continuation candles challenging the blue pivot zone near $4,170. Even though the price has remained above the pivot zone thus far, the existence of a string of lower highs suggests greater dispersal. During the most recent lows, there were rejection wicks, suggesting an effort to absorb the sell pressure. The volume profile indicates that the $4,170 to $4,200 range is the next support zone to keep an eye on, and the RSI has dropped below 45, signaling further waning momentum. As long as the price stays below $4,222, the overall picture is neutral to negative. A declining trend line is still present around $4,282, which could offer resistance. For those looking to trade a counter-trend stabilization or reversal, the blue pivot zone still presents buy possibilities despite the overall downturn.