FXStreet notes that gold strength in Q2 has been capped ahead of the key $1959/66 highs for the year and late 2010 and the subsequent move lower has seen the market break back below the 200-day average. Strategists at Credit Suisse believe that this leaves the immediate risk lower in the broader consolidation range heading into Q3.

“Below support at $1765/55 would warn of a fall back to the YTD lows and 38.2% retracement of the entire 2015/2020 bull trend, but with this expected to remain a solid floor. A closing break lower though would warn of a more damaging downturn, with support seen next at the 50% retracement at $1561.”

“Gold has arguably overshot the move in Real Yields, however, we continue to look for 10yr US Real Yields to rise to retest their highs seen earlier this year, which would suggest XAU/USD is likely to stay under pressure in its range and the USD continues to hold key supports and is seen under pressure to rise, at least in the short-term, which should also prove a headwind for the yellow metal.”