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Gold Loses Shine as US Dollar Rebounds

Gold prices (XAU/USD) are down around a third of a percent on Tuesday, trading in the $2,310s. This decline comes as the US Dollar (USD) recovers, making dollar-denominated Gold less attractive.

Dollar Strength Caps Gold Price

  • A rebound in the USD following hawkish comments from Fed officials weakens the appeal of Gold.
  • Despite weaker-than-expected US jobs data, Fed policymakers remain cautious about cutting interest rates too quickly.
  • Markets anticipate potential rate cuts later this year, but not as soon as previously expected.

Technical Analysis: Gold at a Crossroads

  • Gold price encountered resistance at the top of its recent trading range and has retreated.
  • Support lies around the 50-day SMA (Simple Moving Average) on the 4-hour chart at $2,317.
  • A break below the range could see Gold fall towards $2,280, potentially reaching $2,300.
  • A breakout above the range resistance could signal a move to $2,353 or even $2,370.
  • Confirmation of a breakout would require a decisive candlestick pattern exceeding the range boundaries.

Unfinished Measured Move Pattern

  • Gold might still be unfolding a bearish Measured Move pattern initiated in April.
  • This pattern suggests a potential decline towards $2,286 or even $2,245.
  • A confirmed break below the recent range and the May 3rd low would solidify this bearish scenario.

The future direction of Gold hinges on the strength of the US Dollar and the Fed’s monetary policy stance.