GOLD SELL 3390Several key factors are contributing to the current bearish sentiment in XAUUSD (Gold/USD):
1. Easing Geopolitical Tensions
Gold is widely considered a safe-haven asset, attracting demand during periods of heightened geopolitical risk. Recently, concerns about escalating conflicts in the Middle East have subsided, leading to a reduction in safe-haven demand and a shift of capital toward riskier assets.
Reports of potential diplomatic engagement between major world powers (e.g., US and Russia) and a lack of escalation in ongoing conflicts have further reduced the urgency to hold gold for safety.
2. Hawkish Federal Reserve and Interest Rate Expectations
The Federal Reserve's minutes revealed policymakers are hesitant to cut interest rates and are even considering further hikes due to persistent inflation. Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, making it less attractive to investors.
This expectation of prolonged higher rates has strengthened the US dollar and pressured gold prices downward.
3. Technical Breakdown and Bearish Chart Patterns
Gold recently failed to break above key resistance at $3,440 and is now correcting lower toward support at $3,400. A break below this level could trigger further downside, with technical targets at $3,350 and $3,340.
Technical indicators, such as the MACD and RSI, are signaling strong bearish momentum. The price has broken below important moving averages (EMA 200, Ichimoku cloud), and a "death cross" (EMA 50 below EMA 200) has formed, all pointing to further bearish pressure.
Chart patterns, including a bearish double top and a break below the regression channel, reinforce the negative outlook.
4. Reduced Demand from Key Buyers
If global economic uncertainty fades and central banks slow their gold purchases, demand can weaken, further weighing on prices.
Easing US-China trade tensions and a potentially weakening Chinese economy could also reduce gold demand from one of its largest consumers
