US stock market has been trading lower since the start of April, which can be due to quarterly portfolio adjustments and the hawkish FOMC projections. The US yields continue to rise, which is making USD very strong across the board
Even commodity currencies are coming lower for the last few trading days. However, it's a busy week with some central banks' policy decisions, which can have some critical shifts on currencies.
Gold is trading higher as investors want to protect themselves from higher inflation. But the key to metals' direction in the future can be how much Fed will hike in upcoming months. They certainly will try to fight inflation, and if successful, gold may stop at a resistance.
From an Elliott wave theory perspective, we see gold in a bearish reversal mode after that five waves down from the $2070 area. It’s a bearish impulse that signals for a higher degree of an Elliott wave corrective pullback.
Minimum A-B-C legs make Elliott wave correction, so it appears that the current leg up is wave B still so that the upside can be limited. We see a resistance at $1966 followed by a second and much more critical level around $2,000.
Much more important and strong support for the next bounce on metals can be from around the $1844 area on gold, but if $2070 is broken before that, I will immediately turn bullish for much higher prices.