Gold: Bearish below 1653

A brief analysis of the fundamentals:

On Friday (September 23), after the dismal European economic data was released, the risk aversion in the market increased. The US dollar index reached the 112 mark, continuing to hit a new 20-year high, and once rose 1% in the day; the US 10-year Treasury bond yield once It climbed 6 basis points to 3.77%, the highest since 2010. Affected by the rising U.S. dollar, spot gold fell below $1,650 an ounce, the first time since April 2020, with a drop of more than 1.5% on the day. The continuation of the strong dollar will further put pressure on the formation of gold. This week, we will focus on the impact of major economic data on the US index.

Spot gold XAUUSD 4-hour chart

A brief technical analysis:

From the 4-hour chart, after the gold price fell below the support of the previous low of 1653, it entered an accelerated downward channel, and the MACD volume can be enlarged again below the zero axis, indicating that the bear trend has re-dominated the market, and the probability of continued decline within the day is high.

Long and short turning point: 1653.20

Resistance: 1653.00 1670.00

Support level: 1630.00 1620.00

Trading strategy: bearish below 1653.20, target 1630.00 1620.00

Alternative strategy: bullish above 1653.20, target 1670.00 1685.00