FX.co ★ HiDe_N_SeEk | XAU/USD, GOLD

It appears like gold may have hit its lowest point for the bearish downturn. It tested a support zone supported by the 200-day moving average on Thursday, extending its drop to a new low of $4,366. Following a slight undercut of the average, which is close to $4,401, buyers regained control, resulting in an intraday surge and a successful day's closing. A lower daily high of $4,516 is expected to complete a potentially bullish hammer candlestick pattern. Gold may have reached a bottom following two successful tests of support close to the average, which might eventually result in a challenge to the current record high of $5,597. A slide below today's low, however, would alter that since it would indicate a potential prolongation of the decline and a collapse of support close to the long-term trend signal. The lower swing high at $4,589 is important near-term resistance. The short-term slump will undergo a positive reversal if there is a clear gain over that level. The 20-day moving average, which is currently at $4,589 and declining, would also be regained. However, the 50-day moving average indicates the next, more important price level. As resistance to the previous two advancements, it was successfully tested. Today, it formed a crucial confluence resistance zone by converging with the downtrend line. Consequently, above that average, which is currently close to $4,631, a bullish trend reversal signal will be triggered. Gold may cause an upside breakout above the 50-day average prior to June 11, when the apex of a symmetrical triangle is seen. Gold aims for a lower swing high at $4,774 and the 100-day moving average, which is currently close to $4,804, after successfully regaining the 50-day average. A bullish reversal and a possible continuation of the advance into higher resistance levels not yet touched in the present corrective phase will result from a sustained advance above the lower swing high.

As markets weigh the new round of strikes from both sides around the Strait of Hormuz against claims of a US-Iran peace framework, gold buyers in Asia seem to have become more cautious on Friday. The Federal Reserve's (Fed) interest rate hike forecasts, driven by hotter-than-expected inflation statistics, continue to strengthen the dollar. The core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation indicator, increased 3.3% year over year compared to the central bank's 2% objective, according to data released on Thursday. This was the fastest increase in three years. The upcoming developments regarding the US-Iran peace front and the movement of oil prices will determine the next move in gold. As of this writing, gold is maintaining its position above the crucial daily support due to the recent decline in oil prices. XAU/USD is trading at $4,496.39 on the daily chart. The metal is still under pressure as spot is below the short and medium-term simple moving averages (SMAs). The 21-day SMA is close to $4,585, while the 50-day SMA is around $4,627, both of which reinforce a negative tone. The price is just slightly above the long-term 200-day SMA at about $4,405. Even if the market consolidates just below recent breakdown levels, the Relative Strength Index (14), at roughly 42, is in negative territory, indicating that downward momentum is still overwhelming. The 21-day SMA at around $4,585 is the first hurdle on the upward, followed by the 50-day SMA at about $4,627. If a deeper corrective bounce occurs, the 100-day SMA at about $4,802 is a greater obstacle. Prior to more significant protection at the 200-day SMA at $4,405, immediate support on the downside is in line with the most recent response region on the declining trend line near $4,496; a clear loss of this latter level would probably pave the way for a more noticeable bearish extension.