XAU/USD is trading at around 1,649 below the 21 SMA (1,656). The price is currently located within the downtrend channel which has been underway since October 06.
According to the 4-hour chart, we can see that Gold is under strong downward pressure. A break above 5/8 Murray and a daily close above 1,656 could mean a change in trend and it could reach EMA 200 located at 1,686.
On the other hand, a clear confirmation below 1,641 would expose the low of 1,6391 and the price could even hit 4/8 Murray around 1,625.
The decline in gold is unfolding amid the stability in the Treasury bond market, with yields in the area of multi-month highs. A technical correction in Treasuries could set the stage for a recovery in gold and it could reach the psychological level of 1,700.
The strength of the pivot point for gold is the key to a short-term trend change. The yellow metal extended its decline and touched its lowest level near 1,640.
The metal is currently located above this level and the chart shows that a fractal has formed. In case this technical pattern prevails, we could expect a clear confirmation above 1,656 to buy.
