Technical analysis suggests negative outlook for gold prices

Technical analysis suggests negative outlook for gold prices
Gold prices have retreated from their long-term highs again due to the strengthening of the USD. This trend is not only affecting troubled oil prices but also the value of gold. The correction looks promising for sellers, with the potential to further decrease in value.
From a technical perspective, we can see that the XAUUSD broke out from the channel up pattern (blue lines). This breakout occurred after the price created a Head and Shoulders pattern (green) and also broke through the neckline (magenta) of the H&S formation, leading to a decline in value.

The obvious target for the gold price decline is the 38.2% Fibonacci level, which is currently at 1950 USD/oz. This area also marks a historical top from January and support from March (yellow). Given these factors, the chances of the price reaching this target are quite high, leading to a negative outlook on gold.
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