Gold descends into bear market

Last week, gold saw its biggest weekly loss since 1983 - tanking over 10%!

Price tumbled as much as 3.8% this morning to $4320 – less than a dollar above where it ended last year.

The precious metal has shed over 20% from its all-time high, officially entering a bear market.

WHY?

• Ongoing conflict in the Middle East is boosting energy prices and fuelling inflation fears.

• Concerns over conflict-induced inflation shaving bets around the Fed cutting interest rates.

• Surging US Treasury yields amid sticky inflation fears and reduced rate cut odds.

Note: Traders increased their bets on rate hike to nearly 50% by October

WHAT COULD MOVE XAUUSD THIS WEEK?

It’s a relatively quiet week for US data-wise but ongoing geopolitical risk will keep the volatility taps wide open.

POTENTIAL SCENARIOS:

BULLISH – Should price push back above $4450, bulls may target the 100-day SMA at $4600.

BEARISH – Weakness below $4333 could see prices decline toward $4300 and $4166 – the lower bound of the Bloomberg FX model.