Gold weakens further, with sellers dominating below the falling daily cloud resistance

Gold opened the week on the back foot, dropping around 1.8% by mid-European trading on Monday, as mounting inflation concerns pushed major central banks toward a more hawkish stance, even as they left interest rates unchanged at last week’s policy meetings.

At the same time, elevated geopolitical uncertainty linked to fresh signals of potential escalation around the Strait of Hormuz is partially offsetting the downside pressure, limiting the scope for more aggressive bearish positioning.

The technical picture on the daily chart remains firmly bearish, as recent recovery attempts stalled just below the base of the thick descending Ichimoku cloud. Friday’s Doji, followed by today’s large bearish candle, points to a developing reversal pattern.

Daily Tenkan-sen and Kijun-sen lines are converging and nearing a bearish crossover, while strengthening negative momentum and fully bearish-aligned moving averages reinforce the negative near-term outlook.

Bears are now testing the pivotal $4500 support zone, defined by last Wednesday’s one-month low and the Fibonacci 50% retracement of the $4099/$4899 rally. A break below this level would further weaken the near-term structure and open the way toward $4401 (Fibo 61.8%) and $4285 (200DMA / Fibo 76.4%) as next downside targets.

On the upside, initial resistance stands at $4587 (broken Fibo 38.2%), followed by $4631/41 (daily Kijun-sen / Tenkan-sen), with the key barrier seen at $4665 (daily cloud base).

Res: 4587; 4641; 4700; 4740
Sup: 4510; 4494; 4401; 4351