Gold Market Outlook

As concerns about China's economy, renewed inflation worries due to higher oil prices, and increased wagers on additional US Federal Reserve policy tightening continue to weigh on the market's psyche, risk-off flows continue into on Thursday. The safe-haven USD continues to trade near six-month highs against its main counterparts due to the subdued mood, which allows gold to launch a modest rebound.

The price of gold tested the confluence support of the 20- and 200-DMAs at $... before continuing its five-day losing streak and hitting new one-week lows at $... In order to continue the decline toward the initial demand region just above the $... mark, where the previous week's low of $... coincides, a clear break below the confluence support is required on a daily closing basis. Bullish commitments will then be tested by the $... threshold below which a test of the multi-month low of $... will be inevitable.

Alternatively, in order to make another push toward the 100-DMA barrier at $..., the price of gold must retake the 50-DMA support that has since turned into resistance at $... on a daily closing basis.

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