Gold Intraday Downtrend Intact

Despite heightened tensions between the U.S. and China, the three major U.S. stock indices pared early losses to close with modest gains last Friday. Spot gold climbed 0.4% on day but still below its April-high, raising doubts over a false upside breakout seen last week.

Today, the U.S. equity markets are closed to observe the Memorial Day and the U.K. markets are closed for the Spring Bank Holiday. While a relatively quiet trading session may be expected, a lack of more powerful triggering events might continue to put pressure on gold.

From a technical point of view, spot gold remains on the downside as shown on the 1-hour chart. It has created another lower-high and is heading downward to test its previous low. The level at $1,740 may be considered as the nearest resistance, while a break below the nearest support at $1,721 (where a longer-term rising trend line is located) would be a more bearish signal, and possibly suggesting that the next support at $1,703 is exposed. Alternatively, a break above $1,740 would trigger a re-test to the previous high at $1,754.

Source: TradingView, Gain Capital

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