Gold has been losing ground since early March, generating a profound structure of lower highs and lower lows. Even though the precious metal rebounded strongly from the 29-month low of 1,614 and jumped above its restrictive trend line, it quickly retreated again within its long-term descending channel.
The short-term oscillators currently suggest that bearish forces remain in control. Specifically, the RSI is flatlining beneath its 50-neutral mark, while the MACD histogram has dropped below its red signal line in the negative territory.
Should selling pressures persist, the recent support zone of 1,640 could act as the first line of defence. Sliding beneath that floor, any further declines may then cease at the 29-month low of 1,614. Failing to halt there, the price could descend to form fresh multi-month lows, where the April 2020 support of 1,566 might curb any further downside moves.
On the flipside, bullish actions could propel bullion towards 1,688, which has acted as both support and resistance in the past two months. Conquering this barricade, the bulls could aim for the recent rejection region of 1,730. Jumping above that zone, the price may ascend towards 1,765 or higher to test the August high of 1,807.
Overall, despite the recent attempts of a trend reversal, gold retreated back to its long-term descending pattern. Therefore, the downtrend is likely to resume, unless the price advances decisively above the upper boundary of its declining channel.