In the past 24 to 48 hours, the gold (XAUUSD) market experienced significant volatility, with prices falling sharply from yesterday’s closing price of 4617.535 USD. Gold broke a crucial support level at $4,960, triggering a medium-term downtrend. Prices slipped below the key psychological level of $5,000 and the 50-day moving average, prompting cautious sentiment among investors.

Recently, Federal Reserve Chair Powell’s remarks have been in focus, with gold prices hovering near the 50-day moving average as traders await further policy guidance. Meanwhile, rising U.S. Treasury yields have drawn funds toward bonds, increasing selling pressure on gold. Although oil prices hit new highs amid geopolitical tensions, these factors have not notably supported gold prices.

For the average investor, the recent gold price action can be viewed as the market balancing expectations regarding the Fed’s monetary policy and international geopolitical risks. When U.S. interest rate expectations and bond yields rise, gold’s appeal as a non-yielding asset diminishes temporarily. This suggests gold may undergo a short-term adjustment rather than a rapid rebound.

Daily Chart

The daily chart of XAUUSD reveals a clear downtrend since mid-February, with prices recently breaking below multiple moving averages, including the 50-day MA. The Bollinger Bands are widening, indicating increasing volatility with price gravitating toward the lower band. The MACD has generated a bearish crossover (death cross), signaling strong bearish momentum, while the RSI hovers near oversold territory, suggesting a possible short-term bounce but overall pressure remains significant.

1H Chart

On the hourly chart, the last 3-5 days show sharp price fluctuations forming a descending flag pattern, typically a bearish continuation formation pointing to further downside potential. Price action repeatedly tests and falls below short-term moving averages. The Bollinger Bands are tightening and the MACD remains negative, with volume increasing recently confirming selling pressure. Recent candlesticks such as clustered bearish candles and an inverted hammer indicate sustained selling momentum in the near term.

Technical Trend:  Trend Direction: Cautiously Bearish

Technically, XAUUSD’s MACD death cross and oversold RSI on the daily chart confirm a bearish trend with short-term corrective bounces possible. The dominant descending flag pattern formed over recent days suggests continuation of the downtrend if the price breaks below the flag’s lower boundary. Key support and resistance levels will be critical for positioning trades. Traders should watch volume spikes and intraday reversal signals to identify timely entry and exit points.

Today’s global economic calendar (GMT+1) includes several data points like Japan’s Machinery Orders and Australia’s employment reports, which are not directly impactful for XAUUSD. Attention should be given to the US Philadelphia Fed Index and weekly Jobless Claims at 13:30 GMT+1, which can influence USD strength and consequently gold prices. Strong US data would likely bolster USD, putting further downward pressure on gold, while weaker numbers may provide temporary relief for gold prices.

Resistance & Support

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