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Gold remains under pressure

The new trading week, gold again begins with decline, despite the weakening dollar and the exacerbation of geopolitical risks, which, as a rule, lead to an increase in demand for the yellow metal.

The main news on Monday, which had the strongest impact on the dynamics of trading, was the decision of Donald Trump not to extend the exemption for a number of countries regarding oil sanctions against Iran. From May 2, China, Japan, India and a number of other countries should abandon the purchase of Iranian oil in order not to fall under US sanctions. In response to these actions, Iran threatened to close the Strait of Hormuz, through which the main energy supplies from the countries of the Persian Gulf are transported. Trump's decision led to a sharp rise in oil prices to multi-month highs and a significant strengthening of the currencies of oil-producing countries, which in turn put pressure on the US dollar.

Today, the dollar is again trading in the green zone, increasing the pressure on the yellow metal. At the time of writing, gold was trading at a decline of 0.3%, while maintaining priority of the further development of the bearish wave.

On Tuesday, the market will not have a lot of important economic news, so the situation on stock markets and geopolitical news will have a major impact on the gold movement. In the US economic calendar, only data on sales of new housing and PMI services can be distinguished, which can have a moderate impact on the dynamics of the dollar and gold, respectively.

On the chart, the situation develops in a negative scenario. After the breakdown of key support at 1276.50, the price managed to consolidate below this mark, completing the formation of a medium-term reversal, within which we can expect a decrease in quotations to 1240.00. Locally, the main resistance for the price is the level of 1279.50, from which a new bearish wave is now developing with an intraday target of 1270.00. Therefore, preference is given solely to shorts.

 Resistance Levels: 1279.50, 1284.00, 1294.00;

 Support levels: 1270.00, 1263.00, 1260.00.

The main scenario is a decline to 1270.00 and a correctional pullback to 1279.50.

An alternative scenario - a breakdown of 1270.00 and a decrease to 1263.00.

Despite the fact that there are no news on the market right now that could exert strong pressure on the yellow metal, we see a bearish trend on the chart, so intraday preference should be given exclusively to shorts that can be searched for at the nearest resistance levels - 1275.50 and 1279.50.

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