Gold Retreats as US Long-Term Yields Rise for Two Days【May 30, 2024】

Fundamental Analysis

• US long-term yields have risen for two consecutive days, with US officials commenting that a rate hike cannot be ruled out.
• Gold is in a correction phase, breaking below the upward trendline.
• The overall strength of the USD is exerting selling pressure on gold.

XAUUSD technical analysis

Analyzing the daily chart of gold, it can be confirmed that gold has broken out of the upward trendline. What should be considered is the “N pattern.” After three consecutive large bearish candles, a small bullish candle appears for four days, followed by another slightly larger bearish candle. This can be considered a “three black crows” candlestick pattern. It suggests that gold is in a downward phase.

Drawing the Fibonacci expansion, 61.8% corresponds to 2286 USD, and 100% corresponds to 2240 USD. Currently, gold is trading around 2335 USD, indicating there is room for a 100 USD decline.

Focusing on the fundamentals, US officials have commented on the possibility of additional rate hikes, and US long-term yields have risen for two consecutive days, maintaining a strong USD trend. For now, we should keep an eye on gold with a bearish perspective.

Day trading strategy (1 hour)

Checking the 1-hour chart of gold, after rebounding around 2327 USD, gold continued a gradual correction but has turned downward again. The ADX indicates that -DI is above -25, and ADX is above 30, which is evidence of a strengthening downward trend.

Based on the Fibonacci expansion, the immediate target is around 2286 USD. There is a weekly support line at 2317 USD, which may take some time to break through.

For day trading, we should take a short to medium-term selling approach. For new short positions, the target is 2286 USD, with a stop at around 2350 USD.

Support/Resistance lines

The support and resistance lines to consider going forward are as follows:

• 2286 USD: Fibonacci 61.8%

Market Sentiment

XAUUSD: Sell: 51% Buy: 49%

Featured Currency Pair of the Week (GBPCAD)

GBPCAD continues to show low volatility. The strengths of both currencies are balanced, and there is no clear direction. The recent high is 1.7450 CAD, and the recent low is 1.737 CAD, forming a range-bound market. Funds are concentrating on the CAD. A range strategy seems best for the British Pound to Canadian Dollar for now.

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*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.