Bears weigh on spot gold and now eye the $1,801-04 support

June 24, 2022 - 2 weeks ago
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The precious yellow metal was softer in the Thursday session as the market bulls struggled to extend the daily gains past the $1,835-38 resistance.

Meanwhile, the US dollar index (US DXY), which tracks the greenback against a basket of its peers, holds above the 104.00 handle.

With the market price closing beneath the $1,830 level (New York close), further weakness is assessed on the path for spot gold.

Elsewhere, during his second testimony in front of Congress this week, investors focused on U.S. Federal Reserve Chair Jerome Powell downplaying the idea that government pandemic aid was the key factor fueling U.S. inflation and instead blamed a confluence of global issues, including the war in Ukraine.

U.S. Fed Powell acknowledged those risks in two days of testimony to lawmakers, saying that a recession was possible and that a soft landing would be “very challenging” as inflation hits 40-year highs and interest rates surge higher, making it more expensive for consumers to borrow money.

Based on the technical assessment, the Relative Strength Index (RSI) indicator, 3-daily ‘lookback’ is negative, while the Moving Average Convergence Divergence (MACD) supports a weak negative signal, while the ADX indicator holds to a ranging market.

The close beneath $1,830 now strengthens the bearish case to potentially reach the region of $1,801-04 – Reassess from there.

Viewing the topside, the resistance is located at $1,828 (minor), with $1,835-38 assessed above.

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