For now, gold’s path of least resistance or decline? If this happens, bulls could be saved!

Spot gold regained its intraday losses in Asian trading on Tuesday and is now back above $1930 as markets focus on new news about the situation in China and the United States.

FXStreet analyst Dhwani Mehta has written a brief analysis of gold’s short-term moves. Here’s what he says:

Gold remained under pressure on Monday amid thin US holiday trading, settling around $1,929 for a fourth straight session at a new low.

Against the backdrop of a broadly stronger dollar, gold has maintained its recent trading range, with a downside bias intact. Rising European stock markets added to pressure on the haven of gold.

Investors shrugged off last week’s correction in U.S. stocks and continued tensions between the U.S. and China.

The science and technology war between China and the US escalated on Monday after reports that the US was considering imposing export controls on China’s state-owned SMIC.

The dollar rose in early trading on Tuesday on a bearish view of the euro and dovish expectations from the European Central Bank. Meanwhile, the dollar’s upbeat tone was also helped by a fall in the pound as fears of a no-deal Brexit intensified.

As a result, gold is likely to remain less favoured as US traders return to the market after a long weekend.

However, any escalation in Us-China relations could provide temporary respite for gold bulls. The United States is considering a ban on cotton imports from China’s Xinjiang province, according to a new Report in the New York Times.

From a technical perspective, gold further broke below range after yesterday’s downtrend consolidation, confirming the breakout of the symmetrical triangle on the hourly chart. Gold closed below uptrend support at $1927.42.

Gold’s downward movement may continue to target $1,895. Above that level, bulls could try to hold on to Friday’s low of $1,916.42. A break below that level would test the $1,900 mark.

The 14-day relative strength index (RSI) fell in bearish territory, supporting the case for further declines.

Conversely, any attempt to rally could face strong upside resistance to $1,930, which is where the bearish 21-hour average meets the 50-date average.

A sustained break above $1,930 could reignite the movement to $1940 (100-period average), with further breaks towards $1949.29 (200-period average), which is key to reigning bullish confidence.

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