Gold ends up in the negative territory amid reducing safe haven demand: Head & Shoulder pattern adds to the bearish bias

Gold prices extended their decline on Thursday, slipping to a three-day low near $3,370 during the early European session. Risk-on sentiment, driven by optimism around the US-Japan trade deal and progress in US-EU tariff talks, weakened safe-haven demand, leading to follow-through selling in gold for a second consecutive day.

Meanwhile, a modest rebound in the US Dollar from multi-week lows added pressure on gold. However, lingering uncertainty over the Fed’s rate-cut outlook and concerns over central bank independence may limit USD strength and provide some support for gold in the near term. Traders now await global flash PMI data and key US macro releases for fresh direction.

XAU/USD TECHNICAL OVERVIEW

Technical Structure: Gold displays a mixed technical structure, with a Bearish Engulfing pattern on the daily chart, despite holding above the 20-day Simple moving average. On the 4-hour chart, a Doji candle indicates indecision, while the 1-hour chart reveals a potential Head & Shoulder pattern, suggesting a possible short term reversal. 

Weekly Trend: Neutral

Intraday Trend/ Intraday Strategy: The intraday bias remains bearish and favours the approach of Selling on Support Breakdown and Selling on Rise

Major Support: 3370, 3350, 3330
Major Resistance: 3397, 3420, 3438