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There appears to be a potential shift in investment strategy, possibly due to the end of the month/quarter, which is causing gold to remain unstable despite a decrease in bond yields. Gold experienced a 0.7% decrease yesterday, and more importantly, it broke through a critical support level on the charts which was previously relied upon by buyers. This support level was the 100-day moving average (indicated by the red line) which had been important in recent weeks.

Although the swing higher from March to May this year is still somewhat supported by the 50.0 Fib retracement level, which can be observed at approximately $1,935.84, breaking the 100-day moving average creates a favorable opportunity for sellers to look for additional downward momentum.

The issue at hand is the proportion of the current week’s financial movements that are linked to the aforementioned rotation strategy. This could compromise the belief that gold prices will experience a pronounced decline. However, if you only consider the technical aspects, the conditions are in place for those who wish to sell to begin pushing for a downward trend.

The most important event with potential risks today is the testimony of Fed chair Powell to Congress, but it would also be wise to monitor the UK’s inflation data.

In case the price declines in the upcoming sessions, it will be crucial to observe the $1,900 level.

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