Gold Price Analysis: Sidelined after ending three-day winning streak

• Gold snapped a three-day winning run on Wednesday despite risk aversion. 
• The US dollar continues to attract haven flows.
• Gold has formed a contracting triangle on the hourly chart. 

Gold is lacking a clear directional bias in Asia, having snapped a three-day winning streak with a 0.75% drop on Wednesday. 

The yellow metal is sidelined near $1,715 per ounce at press time despite heightened coronavirus-led recession fears and the risk-off tone in the global markets. 

The US stocks put in a negative performance on Wednesday alongside broad-based losses in the Europen equities. Even so, the safe-haven gold declined, possibly due to the 0.72% uptick in the dollar index, which tracks the value of the greenback against majors. The price action is indicative of markets’ preference for the US dollar as a safe haven. 

From a technical standpoint, the overall trend remains bullish with metal holding above the former resistance-turned-support of $1,703 (former seven-year high reached in March).  

The hourly chart shows that gold is now consolidating in a narrowing price range, having exited the falling channel during the overnight trade. A range breakout would confirm an end of the price pullback and open the doors to a re-test of $1,750. 

On the flip side, a range breakdown could cause more profit-taking, leading to a deeper pullback to $1,690. A daily close under $1,703 would neutralize the bullish setup on the daily chart. 

Hourly chart

Trend: Bullish

Technical levels