Gold remains under pressure and targets key support levels

Gold prices extended their decline on Tuesday morning, following a two-day sharp drop (down 2.5%) that paused on Monday.

A stronger dollar, driven by growing expectations of elevated U.S. interest rates, continues to pressure the metal’s price.

Fresh selling broke below the trendline support at $2643 today and is approaching key support at $2630 (daily cloud base, reinforced by the Kijun-sen). A break below this level could accelerate declines towards $2613 (Dec 6 higher low) and $2605/00 (100DMA, Nov 26 low, psychological level).

In this scenario, a double top pattern ($2721/26) may be completed, risking further weakness, with $2536 (Nov 14 low) potentially coming into focus.

Last week’s Doji candle with a long upper shadow suggests strong selling pressure remains, adding to bearish signals.

The technical outlook on the daily chart is weakening, with the 10/20/55DMAs forming a bearish setup and the 14-day momentum falling below the centerline. However, a broader sideways trend is likely to persist as long as prices stay above the $2600 zone.

All eyes are on the Federal Reserve, which is expected to cut rates by 25 basis points at the conclusion of its two-day policy meeting on Wednesday. However, expectations for more aggressive rate cuts are fading as inflation remains elevated and is expected to rise further, in line with Trump’s economic plans for his second term in the White House.

Res: 2653; 2660; 2667; 2681
Sup: 2630; 2613; 2600; 2581