Gold breaking down again

23/03/2021

Tuesday brought another selling on precious metals, and gold was down 0.65% during the US session, falling to one-week lows at around 1,725 USD.

Gold is testing a stronger support zone near 1,725 USD, and if the price drops below that level, further decline toward previous lows of 1,720 USD seems likely. 

Moreover, it looks like a very nice head and shoulders pattern, which is a bearish reversal formation. The formation's neckline is in the 1,725 - 1,720 USD zone, and a breakdown below that neckline could make this formation valid. 

The full potential of this pattern is circa 35 USD, thus targeting 1,690 USD. 

Gold is going down even when US yields are dropping, which might be another bearish sign that the previous short-term rally is exhausted and the medium-term downtrend is about to continue. 

The resistance is near 1,740 USD, and gold needs to jump above that level to cancel the immediate bearish momentum. 
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