Fundamentals:
The bearish outlook for gold is largely driven by the strength of the U.S. dollar and rising interest rates. With the Federal Reserve maintaining a hawkish stance to combat inflation, bond yields have been climbing, which typically makes non-yielding assets like gold less attractive. Additionally, strong economic data from the U.S. signals a robust economy, which reduces the appeal of safe-haven assets such as gold. As long as the Fed continues to tighten monetary policy and the global economy remains resilient, gold is likely to face downward pressure.
Technical Analysis:
On the charts, gold has broken below key support levels, indicating the potential for further downside. The recent price action shows a clear pattern of lower highs and lower lows, confirming the bearish momentum. The 50-day moving average is sloping downward, and the Relative Strength Index (RSI) is in overbought territory, suggesting that gold is primed for a pullback. If the price breaks below the next support zone around $1,850, we could see a continuation of the downtrend toward $1,800 and potentially even lower. Risk management is crucial, but the technical setup favors a short position in the near term.