Weakness in global markets threatens gold's well being

In tandem with our expectations, gold dropped below $1,910. Significant developments accompanied this movement on the daily chart; RSI, MACD, and Stochastic continued to form bearish structures, and ADX began to rise (indicating a growing trend). As a result, we remain bearish on gold in the short term and expect it to test the $1,900 level. If it breaks below this level, it will further bolster a bearish case. In such a scenario, we will watch the support near $1,893 and its ability to hold selling pressure. If it is also broken to the downside, we expect gold to drift toward $1,875. As a result, we still wait for a better price before committing more capital to the asset.

Illustration 1.01

In the previous article, we highlighted how MACD was approaching the midpoint on the daily chart. The yellow arrow indicates a bearish crossover.

Illustration 1.02

The picture above shows the daily chart of XAUUSD and two simple moving averages. The yellow arrow indicates a looming bearish crossover between the 20-day SMA and the 50-day SMA.

Illustration 1.03

Illustration 1.03 shows the daily charts of various indices. We would like to reiterate that weakness in global markets continues to present an obstacle to higher prices in gold as investors might be forced to sell it in order to cover losses elsewhere (this was a widespread phenomenon during 2022).

Technical analysis
Daily = Bearish
Weekly = Bearish

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Comment:

XAUUSD halted a decline near $1,896 (at least for now).