Gold came under some renewed selling pressure on Tuesday and dropped to over one week low, around $1195 level in the last hour. Should traders expect any subsequent weakness? What does the formation on the 1-hourly chart show? Let’s find out with today’s 4 September XAUUSD Price Technical Forecast.
4 September, OctaFX – After yesterday’s brief pause, the US Dollar caught some fresh bids and was eventually seen as one of the key factors prompting some fresh selling around the dollar-denominated commodity.
Gold Fundamental Highlights
Against the backdrop of growing trade tensions, a goodish pickup in the US Treasury bond yields underpinned the greenback and exerted some additional downward pressure on the non-yielding yellow metal.
Adding to this, a slight improvement in investors’ risk-appetite, as depicted by a mildly positive tone around equity markets further dented the precious metal’s safe-haven status and collaborated to the weaker tone.
Meanwhile, the latest leg of sudden drop over the past hour or so could also be attributed to technical selling below the key $1200 psychological mark. Hence, a follow-through weakness, even below Monday’s swing low, now looks a distinct possibility.
XAUUSD Price Technical Forecast
The commodity has been trending lower alongside a descending channel formation on the 1-hourly chart. Overnight rejection from 100-hour SMA adds credence to the bearish chart pattern and thus, increases prospects for a further near-term downfall.
Any subsequent weakness below the $1296-95 region is likely to accelerate the slide towards the trend-channel support, currently near $1190 area. A convincing breakthrough would signal a fresh bearish breakdown and pave the way for an extension of the downward trajectory.
Alternatively, recovery attempts back above the $1200 handle might continue to confront some fresh supply near 100-hour SMA and is closely followed by the trend-channel hurdle, currently near the $1204 region. Only a decisive break-through the mentioned barrier would negate the bearish outlook and prompt some near-term short-covering bounce.
This article about 4 September XAUUSD Price Technical Forecast was provided by OctaFX. It should substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.