The price of gold has been in a bearish stance for the past few days after six consecutive weeks of gains, rising from around $1,791 to $1,925 per ounce.
PP Link Securities business manager Chhea Chhayheng says the drop was significant.
With the daily charts, the bearish trend started last Thursday when gold, which had been looking to break $1,950 per ounce, fell to around $1,920. Wednesday’s opening price was $1,928.
Chhayheng says prices below the strong technical support of around $1,880 per ounce were the next short-term targets for selling, while the historical resistance of $1,950 per ounce was the uptrend for February.
“For the long-term long perspective, based on the daily candlestick, there is a three-month uptrend, and the next upward price target is to achieve a closing price above the strong resistance of $2,000 per ounce,” he says.
The pressure on gold is being weighed by the fundamentals of US interest rates and employment figures, both siding with gold’s reverse-price currency, the US dollar.
Investing.com’s Ambar Warrick said on Monday: “Gold prices retreated on Tuesday, coming under pressure from a stronger dollar as caution kicked in ahead of a Federal Reserve meeting this week, while broader metal markets also ticked lower.
“The yellow metal marked a slow start to the week ahead of the conclusion of a two-day Fed meeting on Wednesday, where the bank is widely expected to raise interest rates by 25 basis points.”
FXStreet reported on Monday: “The gold price has drifted lower for a third day and is testing structure as we head towards key events this week, including the Federal Reserve and the European Central Bank as the key events, the Bank of England and also US jobs data.”
The forecast, based on Forexfactory.com, shows the change in US employment figures in January was 190,000, slightly lower than the previous month, with the unemployment rate up to 3.6 per cent from 3.5 per cent, while average hourly earnings remain at 0.3 per cent.
“The expectations for the US jobs data are very tight, causing the price of gold to so far move in a range of $1,934 per ounce to $1,920.
“The hourly chart indicates that the price is being pressured into the day’s lows as traders get ready for the Fed meeting on Wednesday,” Chhayheng says.