The strength of the US dollar (USD) has pushed down the price of gold to a new low at 1,891. This level represents important support that gold tested on March 29.
Gold is currently recovering and has managed to get back above the 21 SMA around 1,901.
According to the 1-hour chart, the trend in gold is moving lower, although the fact of finding support above the important area of 1,890 is easing the pressures.
If the metal fails to consolidate above 1,901, gold could lose strength and acceleration to the downside could occur shortly. As long as gold remains above weekly support at 1,890, losses will remain limited. In the event that the support gives way, we would expect acceleration to the downside towards 6/8 Murray at 1,875.
US government bonds are retreating amid a resurgence in security demand. Yields of 10-year Treasuries are currently trading at 2.79%, down from last week's high of 3%.
If US bonds continue their technical correction, it could reinforce the strength of gold and its price could reach the resistance of 1,926 and could even reach the 200 EMA at 1,939.
The eagle indicator on 1-hour charts is giving a positive signal as it is breaking out above the oversold zone and is likely to give gold a technical bounce in the coming hours.
The 4-hour chart shows that the technical indicators reached oversold conditions. Any technical bounce back towards the 1,939 zone will only be a technical correction as the trend remains down. Therefore, we can expect the level of 1,926 to 1,939 to resume selling with targets of 1,891 and 1,875.
