Gold prices are trading soft this week as countries ease their pandemic lockdowns, leading to a reduction in safe-haven demand due to global economic optimism and a strong rally in the global stocks.
Riskier assets continue to rally amid the prospects for economies reopening from the pandemic lockdowns. Japan ended its state of emergency everywhere in the country. Germany aims to lift travel warnings for 31 European countries starting June 15 and, also, UK Prime Minister Johnson announced that non-essential stores would be reopened starting June 15.
Moreover, gold prices have been trading in the narrow range since April 14. It has been facing strong supplies near $1760-$1790 range on the higher side and luring strong demand near $1680-$1660, where horizontal support is formed in Weekly/Daily Charts.
Worth noticing is that certain indicators are giving an early indication of reversing the trend in the gold and hinting likelihood of correction in the prices, later or sooner, for a multi-week time frame. MACD, RSI, and Stochastic are tiring or steadily sloping down. MACD and DI have already given bearish confirmation on Daily Chart.
Gold looks increasingly vulnerable to deeper profit-taking in the coming weeks or so if it breaks horizontal support of $1660-$1675 and sustains below it.