The commodity kicked off the third quarter in a very bad fashion, since it runs its fourth consecutive negative week and month, having slumped to the lowest levels of the year.
The move came after fears of recession sparked risk aversion and investors overwhelmingly preferred the safety of the US Dollar and gave gold the cold shoulder.
The technical outlook had already been tough for XAU/USD, which is now in risk of breaching 1,752, but bears may not be ready yet to challenge 1,721.
The Relative Strength Index hit the most oversold levels since late-April and this could lend support in the near-term. As such, a bounce back above 1,780-4 could be in the cards, but a strong catalyst will be required for further recovery towards mid-1,810.
However, the RSI oversold levels in April had not prevented further new lows and XAU/USD is in difficult spot, while the region above mid-1,800 is definitely unfriendly.
Markets now turn to a busy economic calendar, which features US PMIs and the minutes form the Fed's June policy meeting, when it had raised rates by a historic 0.75%.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.