#XAUUSD @ 1738.19 -imp levels: Gold continues losing ground for the sixth straight day and drops to a nearly four-week low.

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• Gold continues losing ground for the sixth straight day and drops to a nearly four-week low.
• Hawkish Fed expectations, rising US bond yields, sustained USD buying exert heavy pressure.
• Recession fears and the risk-off impulse could limit the downside for the safe-haven XAU/USD.

The pair currently trades last at 1738.19.

The previous day high was 1759.48 while the previous day low was 1745.63. The daily 38.2% Fib levels comes at 1750.92, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1754.19, expected to provide resistance.

Gold prolongs its recent bearish trajectory for the sixth successive day and drops to a nearly four-week low on Monday. The downfall, however, stalls near the $1,728 area amid the prevalent risk-off environment, which tends to benefit the safe-haven precious metal.

The market sentiment remains fragile amid growing worries over a global economic downturn. This, along with headwinds from COVID lockdowns in China, triggers a fresh wave of the global risk-aversion trade and forces investors to take refuge in traditional safe-haven assets. The anti-risk flow allows gold to trim a part of its heavy intraday losses, though any meaningful recovery still seems elusive.

The relentless US dollar buying remains unabated on the first day of a new week amid expectations that the Fed would continue to tighten its monetary policy to tame surging inflation. In fact, the USD Index, which tracks the greenback’s performance against a basket of six other currencies, climbs to its highest level since mid-July and should act as a headwind for the dollar-denominated gold.

The prospects for further interest rate hikes remain supportive of elevated US Treasury bond yields. This turns out to be another factor that should keep a lid on any attempted recovery for the non-yielding yellow metal. The fundamental backdrop suggests that the path of least resistance for gold is to the downside, though bearish traders might prefer to wait for this week’s key event risk.

Market participants will closely scrutinize Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday for clues about the possibility of a 75 bps rate hike move at the September meeting. Furthermore, this week’s important US macroeconomic releases will play a key role in influencing the USD price dynamics and help determine the next leg of a directional move for gold.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1733.25 at the time of writing. Pair opened at 1747.68 and is trading with a change of -0.83 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1767.46, 50 SMA 1774.28, 100 SMA @ 1829.23 and 200 SMA @ 1840.27.

The previous day high was 1759.48 while the previous day low was 1745.63. The daily 38.2% Fib levels comes at 1750.92, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1754.19, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1742.38, 1737.08, 1728.53
• Pivot resistance is noted at 1756.23, 1764.78, 1770.08

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