Article by: ETO Markets

Significant metals selling has occurred as a result of positive US economic data and the Federal Reserve's hawkish views, raising questions about the likelihood of a Fed rate-cutting cycle. In that regard, the metal's upside potential is limited as markets begin to rebalance their bets on the Fed, which is driving up US rates, which are frequently regarded as the price of holding non-yielding commodities.

XAU/USD trades range bound with little discernible directional strength, but buyers appear likely to defend the $… level based on the most recent test of the level. The yellow metal fell precipitously, as seen on the daily chart, as it approached a bearish 20-SMA at about $... The longer moving averages show little directional strength and stay below the present level. 

The 4-hour chart indicates that the risk is skewed to the negative in the near future. A somewhat bullish 20-SMA is where XAU/USD struggles, and above it, the longer ones begin to decline. Technical indicators are finally moving into negative territory and crossing their midlines, but not enough to support a further down move.