XAU USD

Gold is attempting to break out after a brutal selloff, just as the US dollar and Treasury futures show signs of turning. Historical extremes, shifting momentum and key technical levels suggest a potentially important moment for gold traders.

As the trading week continues to unfold, gold is once again facing difficulties in regaining momentum in the short term. This can be seen in the performance of the last three trading sessions, where the metal has declined by approximately 0.9%, resuming a bearish dynamic that has once again become evident in recent market activity.

Gold is testing a major inflection zone as stretched downside momentum raises the risk for a reaction into key support.

Gold bears remain in control as futures positioning weakens, but the 4,000 level could provide support and trigger a countertrend rebound.

As the trading week comes to an end, weakness around gold price action remains evident in the short term. This can be seen in the performance of the past two sessions, where the metal has declined by approximately 0.3%. Although the move has not been particularly aggressive, it highlights that buying pressure continues to struggle to regain control of the market.

Softer inflation has revived expectations for a Fed pause, but Friday’s payrolls could put gold’s recovery prospects to the test.

It was a strong sell-off to start the week in gold and despite a Tuesday bounce, sellers are continuing to push following a resistance hit at the $4200 level.

The start of the trading week has not been particularly favorable for gold. This can be seen in recent XAU/USD price action, with the metal falling nearly 4.00% over the last two trading sessions and bringing renewed attention to a bearish bias within the market.

Gold is getting hammered for solid fundamental reasons, but history suggests extreme four-hourly oversold conditions can produce violent countertrend rallies.

A stronger dollar, surging front-end yields and renewed geopolitical tension have combined to push gold back towards key technical support.

Surging Treasury yields sent a jolt across markets last week but, so far, gold prices have held above the FOMC low. The big question now is whether that can continue and, if not, will bulls show up at $4100 or $4k like they did in June and July?

Gold and silver had held up surprisingly well against surging US yields. Wednesday’s DXY breakout may have changed that equation.