Gold Price Analysis: XAU/USD back under pressure after falling sharply to $1836

• DXY holds onto modest losses, falling after rising during four consecutive days.
• Gold unable to hold above $1850, looks vulnerable for a test of $1830/35.

Gold is trading around the same level it closed on Monday, around $1845. The yellow metal tumbled from two-day highs above $1860 to $1836, in two hours. It then rebounded, unable to recover $1850.

Volatility in XAU/USD soared even as financial markets remained mostly quiet moving sideways. The US Dollar is falling at a modest pace. Currency pairs like EUR/USD, USD/JPY, USD/CHF and NZD/USD are moving sideways, without a clear trend. US yields continue to be a key driver. The 10-year hit 1.18% for the first time since March.

From a technical perspective, gold looks biased on the downside in the short-term, while below the $1850 zone, a confluence of an important horizontal level and the 20 and 55-hours moving averages. A recovery above would add support to the yellow metal.

The sharp reversal on Tuesday found support above $1835. A break lower would expose the recent low at $1817 that protects the $1800 zone.

Technical levels