Gold (XAU/USD) Daily Outlook Update The Gold (XAU/USD) currency pair fell for a second straight day on Tuesday, hitting lows below $4,320 in the European trading session after a failed attempt to bounce off the weekly low of $4,400. The precious metal lacks strength against the backdrop of steady consolidation in the US Dollar Index (DXY) above the critical 100.00 mark, driven by growing expectations of Fed rate hikes. Despite the Fed's shift toward a tougher stance at last Wednesday's FOMC meeting, bullion still held its position last week; however, it lost bullish momentum amid the ongoing strength of the US currency. On Tuesday, Boston Fed President Susan Collins and St. Louis Fed President Alberto Musalem backed expectations of another monetary tightening move by the US central bank. On the daily chart, XAU/USD's initial rejection near the $4,400 level has rekindled hopes that bears will move below the neckline of an extended H&S pattern. The daily chart's momentum readings support the weaker bias too, as the RSI(14) continues to struggle to move above the 50 midline, while the MACD is in the negative zone, suggesting gains may be limited. On the downside, however, key resistance lies near the already mentioned $4,230 area, where the lows from August 7 and September 16 meet the head-and-shoulders neckline. If it breaks below this level, the focus will shift to the psychological $4,000. On the contrary, for the bulls to become relevant once again, they will have to break above the weekly high of $4,399 and then exceed the high of September 3 of $4,510.
