05, October 2016

XAU/USD (a 4-hour chart)

General overview

Gold prices decreased on Tuesday as optimistic U.S. data kept weighing on the metal.

Current situation

Gold switched the neutral tone to the bearish one. The XAU/USD extended its weakness on Tuesday. After consolidation during the Asian session the price sharply fell below 1310 dollar per ounce and advanced towards 1280. The pair broke the 1300 and 1290 levels on its way downwards. The 50, 100 and 200 EMAs accelerated their decline in the 4 hours chart. The resistance is at 1300, the support comes in at 1290 dollar per ounce.

MACD decreased which confirms the strength of sellers. RSI is in the oversold territory.

Trading recommendations

A strong breakdown and close below 1290 dollar per ounce could send prices lower towards 1280. However, the instrument is oversold and we do not exclude a roll back towards 1305.