GOLD - The hunt for liquidity ahead of the fall

May 5

XAUUSD is testing the 4,500 level and forming a counter-trend correction. The fundamental backdrop is weak; sellers are likely to return amid sustained demand for the dollar and renewed tensions in the Strait of Hormuz...



Since yesterday’s session, the US–Iran escalation has intensified, pushing the dollar and oil higher.
Inflation risks: An energy shock (rising oil prices) is fueling inflation, reinforcing “hawkish” expectations regarding Fed rates. The dollar is the primary safe-haven and reserve currency, which is weighing on gold.
Gold remains under pressure due to a combination of geopolitical tensions and hawkish expectations regarding Fed rates. Downside potential persists unless there are signs of de-escalation in the Strait. The key question is whether the ceasefire (in effect since early April) will collapse amid a new round of tensions within the context of a local uptrend.

Resistance levels: 4566, 4579, 4600
Support levels: 4510, 4482

Technically, a rebound from support is forming with the aim of a counter-trend retest of resistance and the liquidity zone. A short squeeze could shift the balance toward sellers and trigger a drop toward the support level of the range and the trend.

Best Regards, R. Linda!

May 5

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