The weekly gold chart has charted a lower peak followed by a lower trough and is trending down. The stochastic measuring the strength of the precious metal's momentum is close to its 20 levels (green rectangle). If it drops below and maintains, the gold price will remain under pressure. If the price closes below the red horizontal, it will confirm another lower peak in the downtrend. Also, if it moves below the aqua horizontal, another lower trough will chart, confirming the downtrend.
XAUUSD has held up relatively well, ranging between around $1,750-$2,000, since July 2020. However, real rates turned positive toward the end of April. This yield exerts pressure on the pressure metal. As the Fed hiking cycle continues, this pressure may keep up in the near-to-medium term if the correlation holds.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.