Gold Out of Upward Trend

Gold has been trading out of the upward trend for the past couple of weeks when it exited at $1,330. Since then, it has been struggling to keep above $1,300, currently trading at $1,325.

Despite surpassing the 200-hour SMA, the yellow metal returned below this line several hours later to test the 55– and 100-hour SMAs located circa 1,318.00. The pair was subsequently moving along the former, thus trading in a narrow range between this line and the 200-hour SMA by Tuesday morning.

Given that technical indicators are strongly bearish, this sentiment is expected to prevail in the market and thus push the rate for a test at 1,316.70. Meanwhile, it is still possible that the pair still tries to test the upper boundary of the prevailing three-week channel down. In case the 200-hour is breached, gains should be capped near the weekly PP at 1,320.00.


Chart: XAU/USD H4