- Gold sustains a decline for the second straight session.
- Higher US Treasury yields underpin demand for the US dollar.
- Traders await US inflation data before placing aggressive bids.
Gold extends a decline for the second straight session in the European session. The price refreshes the swing lows near the $1,722 region and maintains downside bias against the US dollar.
At the time of writing, XAU/USD is trading at $1,728.15, down 0.26% on the day.
The US dollar index (DXY) recovers swiftly from the intraday lows around the 92.10 level and is pushing XAU/USD into the lower territory. The upbeat US economic outlook continues to underpin demand for the US dollar.
From a technical perspective, gold has breached the key support around $1,730, the confluence of the previous day low, Fibonacci 61.8% one-monthThe next relevant support is seen at $1,725, where the pivot point one-week S1 lies. The previous week low at $1,721 could offer additional comfort to the XAU bulls. A firm break below the last could trigger a sharp drop toward the pivot point one-day S2 at $1,716. Alternatively, recapturing the $1,730 hurdle is critical to reviving the upside momentum.
The XAU bulls will then need to battle out a dense cluster of resistance levels around $1,735, where the Fibonacci 61.8% one-week coincides with the Fibonacci 38.2% one-dayFurther north, at $1,742 will offer stiff resistance. The previous day high at $1,745 is likely to be a tough nut to crack for the XAU buyers.