- Gold extends losses for the second consecutive day and nears the $4,400 area.
- Precious metals remain vulnerable as geopolitical tensions take a back seat.
- Technical indicators show a growing bearish momentum.
Gold (XAU/USD) deprecates for the second consecutive day on Thursday, after being rejected at $4,500. Bears are looking at a previous resistance area, at $4,400, amid generalised weakness for precious metals.
Investors seem to have brushed off concerns about the rising geopolitical tensions in different regions of the world, from Venezuela to China, Iran, and Greenland. The focus has shifted to the key US Nonfarm Payrolls release, due on Friday, which is expected to clarify the scope of the US Federal Reserve’s monetary easing cycle.
Technical analysis: Indicators highlight a growing bearish momentum
XAU/USD trades at $4,428.46, approaching the $4,400 area, where the 100-period Simple Moving Average (SMA), which has supported the pair’s rally since mid-November, crosses the December 31 and January 2 highs. The lower high this week and technical indicators add to the case of a deeper reversal.
The Moving Average Convergence Divergence (MACD) histogram has slipped into negative territory, and the MACD line has crossed below the Signal line, a negative signal. The Relative Strength Index is dipping below the key 50 level, entering bearish territory.
A confirmation below the mentioned $4,400 area opens the path towards January 2 lows at $4,309, and the December 16, 31 lows near $4,270. Immediate resistance is at Tuesday’s high, near $4,500, which closes the path towards the all-time high, at $4,449, hit on December 26
