Market Analysis: The Price of Gold Drops Below $1,900

The decline in the price of the asset considered a safe haven was facilitated by rising bond yields, which are becoming more attractive for investment in a high-interest environment. According to top Federal Reserve officials, new increases are possible to achieve inflation targets.

At yesterday's low, the price fell below 1,860 per ounce for the first time since March 2023. Will the fall continue? The XAU/USD chart on the 4-hour time frame provides valuable information for thought.

Bearish arguments:
→ Falling tops above the 1,900 level, which formed during August-September, indicate a steady decline in demand.
→ The price is within the local downward channel (shown in red), its upper limit can serve as resistance for recovery and/or a factor for the formation of a new downward impulse.
→ After breaking through the 1,900 level, the price accelerated its decline, which indicates the bears’ confidence.

Bullish arguments:
→ The price has reached the lower border of the channel shown in yellow. This line may provide support, which is already noticeable by the price rebound from yesterday’s low and the positive dynamics in the Asian session today.
→ At the low of the day yesterday, large volumes of trading in gold futures took place on the CME, which may indicate the interest of large players in buying out short positions or even establishing long positions for long-term portfolios.