Gold fades bounce off monthly horizontal support ahead of Fed Chair Jerome Powell’s key testimony. That said, gradually declining RSI (14) and bearish MACD signals add strength to the downside bias. Should the gold sellers manage to conquer the aforementioned support around $1,805, a downward trajectory towards the yearly low of $1,786 appears imminent. However, the metal’s weakness past $1,786 could make it vulnerable to testing the 61.8% Fibonacci Expansion (FE) of April-June moves, around $1,748.
Meanwhile, recovery moves need a successful break of the 100-day EMA level of $1,868 to convince gold bulls. Following that, the $1,900 threshold acts as a validation point before directing the run-up towards the 61.8% Fibonacci retracement (Fibo.) of April-May fall, near $1,917. It’s worth noting that gold’s upside past $1,917 enables the buyers to aim for April’s peak surrounding the $2,000 psychological magnet.
To sum up, gold is set for further downside but Fed Chair Powell need not spoil the mood by taming the hawkish hopes of the US central bank.