Gold extends steep downtrend as dollar firms
Spot gold hits one-week low in European trading on Tuesday, in extension of Monday’s 1.6% fall, holding in a steep downtrend for the fifth straight day.
Near-term action remains pressured by risk aversion that continues to lift dollar, in addition to expectations that Fed will remain in aggressive mode and deliver another big rate hike in Nov 2 policy meeting.
Pullback from $1729 (Oct 4 lower top) has so far retraced over 50% of $1614/$1729 recovery leg), with today’s close below 50% level, reinforced by falling 20DMA ($1672) to boost bearish signals for extension towards targets at $1658 / $1641 (Fibo 61.8% and 76.4% respectively), which guards key support at $1614 (2022 low).
Daily moving averages turned to full bearish setup and south-heading 14-d momentum moved into negative territory, adding to negative near-term structure.
Limited corrective upticks on oversold conditions and partial profit-taking, to provide better selling levels, while the action stays below broken 10DMA ($1686).
Res: 1672; 1685; 1690; 1700
Sup: 1658; 1641; 1620; 1614