Gold is inching lower as price falls to a low of $1,540.33 to start the session. US-Iran tensions are continuing to fade and we are seeing gold retrace its gains from the risk event.
I already warned yesterday that gold was in a precarious spot and may soon be in for a reality check. It is a tricky spot for gold now as the upside move begins to unravel.
Notably, price is even looking to take out the 200-hour MA as seen below:
If sellers manage that, the near-term bias will then turn more bearish. That may open up a move back towards $1,520 and perhaps even $1,500 if markets continue to ride on the risk-on wave in the coming days/week.
Structurally, I am still advocating for gold dip-buying but at this stage I fear that there is still some momentum for it to fall a bit more towards the levels highlighted above.
In the long-run, there is still a lack of evident substitutes for gold - especially given the current economic climate and low rates globally, that is even excluding more potential escalation in geopolitical tensions that may still take place in the future.