Gold settled in the red for the second day in a row, weighed by the strength of the dollar due to growing uncertainty in the Middle East and marginalization of expectations for possible interest rate cuts from the Fed, with US inflation rising further (CPI rose significantly in April).
However, fundamentals are showing mixed signals as the Fed is likely to remain on hold until the end of the year which will add support to the dollar, while growing concerns about further economic slowdown should partially counter the negative impact and keep the metal price afloat.
The near-term move is within the $4,650/$4,770 congestion (also continuing within the daily cloud) and is moving around the midpoint of the range ($4,700 area) after repeated bullish rejections ($4,764/$4,773), with the range floor reinforced by the daily cloud base ($4,667) and the daily Tenkan-sen ($4,637).
The technical picture on the daily chart is mixed (neutral momentum studies/moving averages in mixed setup), although currently the 55/100DMA formation may produce stronger pressure.
Look for initial negative signals on a near-term range floor violation that would reinforce the downside potential on a double top ($4764/73) formation and reveal the next major support at the $4500 area.
On the flip side, a break above $4,773 and the 100DMA ($4,790) would brighten the near-term outlook and open the way for an attack at the top of the daily cloud ($4,848).
Resolution: 4700; 4773; 4790; 4835
SUP: 4650; 4636; 4546; 4500
