Fundamental analysis of XAU/USD

Gold prices fell to new five-month lows amid a strengthening US dollar and rising Treasury yields, helped by positive US economic data. This reinforces the view that the US Federal Reserve continues to pursue a policy tightening course. Indeed, a strengthening US dollar and a rise in 10-year US Treasury yields to 10-month highs have deterred investors from buying gold. The drivers include not only the Fed's hawkish stance, but also broader global concerns such as fears of slowing economic growth in China and weaker growth in other major economies. 

The Fed has raised the rate 11 times since March 2022 to address lingering concerns about inflation. Despite this positive approach, the minutes of the last Fed meeting signaled the possibility of further rate hikes, suggesting that inflationary pressures remain a major concern. These dynamics, combined with factors such as rising US bond yields and a strengthening dollar index, have played a key role in shaping market sentiment towards gold. 
The future of gold looks uncertain and a decline is possible if the key support level of $1893.00 is broken. On the other hand, any possibility of a rate cut in 2024 could provide bullish momentum. It is important to note that, against the backdrop of strong data on the U.S. economy, refuting recession forecasts, the traditional role of gold as a means of protection in turbulent times is declining. This is evidenced by the decline in investor interest amid economic uncertainty.
In the short term, in the absence of any important data or events, gold prices may get some respite by consolidating at recent lows. However, risk aversion and high yields will continue to support the US dollar, posing challenges to gold's recovery. Strong positive news or data is needed to change this trajectory, which could weaken dollar strength and revitalize market sentiment. 
In short, the main drivers - Federal Reserve actions, US economic data, global economic concerns and changes in bond yields influence the gold price, determining current activity and future trajectory.
  
Technical Analysis and Scenarios:

Alligator is currently hungry and signaling a downtrend. The blue line (jaw) is well above the green and red lines (lips and teeth), confirming bearish momentum. Both AO and AC are in the red zone, further emphasizing the sell signal. Given the current indicators, the primary outlook is leaning bearish. If the price breaks below the nearest support level of 1893.00, it will be a strong sell signal.
Main Scenario (SELL)
Recommended entry level: 1893.00.
Take Profit: 1885.00.
Stop Loss: 1895.00.
 
Alternative scenario (BUY)
Recommended entry level: 1900.00.
Take profit: 1906.00.
Stop loss: 1897.00.