FX.co ★ XAU/USD, GOLD

XAUUSD 4-H Time Frame Update Gold XAU/USD continued to struggle to break out of the previous day's bearish trend, and it is currently being heavily sold around 4,950. However, one big reason it is suffering is the strengthening of the US currency, which is surprising given the high expectation of rate reduction. To be honest, gold isn't the only safe-haven asset being sold off; a good market mood plays a large role, as investors shift to more volatile assets. Despite the fact that the US central bank is likely to decrease interest rates more than twice this year, the US dollar has been swiftly gaining ground and remains steady near 97.15. And there is still no apparent reason why. This is making it really difficult for gold because investors are moving away from safe-haven assets, the attitude in the markets is all optimistic, and the US currency is strengthening. In contrast, the uncertainty surrounding a possible second round of US-Iran nuclear talks may actually help gold limit its losses. Looking ahead, traders are watching for the Empire State Manufacturing Index and any Fed comments.

Gold (XAU/USD) is trading around $4,916 on the 4-hour chart and appears to be dropping toward the critical $4,860 support zone after failing to break over the $4,999 resistance level. The price remains below the falling trendline that runs up from the last high of $5,598, which is keeping short-term markets under pressure. The recent failure to hold over $5,100 resulted in several relatively little candles with large wicks at the top, indicating that supply is simply lying there waiting to sell. The 50-EMA is beginning to flatten out at $4,990, but the 200-EMA near $4,685 continues to provide some support to the broader trend. Looking at the Fibonacci levels, gold is trading between 0.382 at $4,859 and 0.618 at $5,141, which defines the present price movement. If gold ultimately breaks below the critical $4,860 level, it will create a nasty trail that might lead to $4,685 and possibly $4,543.