On Tuesday, gold traded mixed within tight borders of appearing channel. The market was gaining in the morning session showing a strong downward impulse in the afternoon. As a result, the day was closed by a slight gain of 0.1%.
Such volatility was due to the high uncertainty that currently exists on the market. Previously, precious metal was under strong pressure from the US dollar, which in recent days began to lose its positions somewhat, thereby weakening the pressure on the yellow metal. Thanks to this, we see short-term corrective movements in precious metals.
Investment and physical demand for gold remains extremely low, which limits opportunities for the recovery of the price even on the background of the weaker USD dollar. As a result, all correctional upward movements so far end with more shorts. Therefore, gold is still traded around the year's low, while retaining the potential for further decline in the direction of an important psychological mark of 1200.
Changes in the general situation can be expected only if the yellow metal begins to regain the status of the leading defensive asset, which can significantly increase demand on the background of continuing high geopolitical risks.
Over the past 24 hours, the situation on the daily chart has not changed much. We see weak bulls attempts to push prices away from new annual lows. Besides this might be just shorts close. The price continues to consolidate in the narrow range of 1214.00-1205.00, which is primarily a signal for us to continue the bearish trend with the next target at 1196.00. Indicators remain in the oversold area confirming the current trend in the market, while both AO and RSI submit local signals to the price turn, which the market continues to ignore. Therefore, we also skip these signals for the time being.