Gold Price Analysis: XAU/USD down by $6 in Asia, weekly chart shows bullish trend exhaustion

• Gold declines despite US-China trade tension and weakness in risk currencies. 
• Technical charts indicate scope for deeper declines in the short-term.

Gold, a safe-haven asset, is flashing red at press time even though the growth-linked currencies like the Aussie dollar are struggling to gain altitude. 

The yellow metal is currently changing hands $1,728 per ounce, representing a 0.40% decline on the day, having hit a high of $1,735 in early Asia. 

The pullback looks confounding if we take into account the lingering US-China concerns and heightened prospects of a prolonged economic downturn in the US, the world's largest economy. 

However, the decline doesn't look surprising from the technical analysis perspective. The weekly chart shows the metal formed a spinning top candle (small body and large wicks) in the five days to May 22. The candlestick pattern has appeared following a notable rally from $1,451 to $1,765 and indicates buyer exhaustion. 

Meanwhile, the daily chart is reporting a bearish candlestick arrangement - prices fell by 1.24% on Thursday and closed below $1,727, confirming the bearish reversal signaled by the inverted hammer created on May 18. On the hourly chart, the metal is trapped in a falling channel. 

As a result, gold could suffer a deeper decline to $1,720 (5-week simple moving average), under which, major support is seen at $1,700. 

A falling channel breakout on the hourly chart, if confirmed, would imply an end of the price pullback from the 7.5-year high of $1,765 and shift risk in favor of a re-test of that level. 

Weekly chart

Hourly chart

Trend: Bearish

Technical levels