Gold Price Forecast: XAU/USD looks to $1750 amid coronavirus vaccine-driven optimism
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UPGRADE- Economic optimism by vaccine progress hurts gold’s safe-haven allure.
- Gold’s 1H chart points to more pain but a bounce cannot be ruled out.
- Gold remains a good selling opportunity on recovery attempts.
Gold (XAU/USD) remains exposed to further downside risks heading into the critical NFP week this Monday, especially after the metal breached the $1800 threshold and closed the week below that level. Gold eroded 4.5% over the week while on track to book the worst month in four months. The spot has lost over $300 since it reached record highs of $2075 in August.
Early Monday, gold witnessed a fresh 15-pips drop and renewed four-month troughs at $1765, as the sell-off resumed amid ongoing optimism surrounding the coronavirus vaccine optimism, suggesting a swifter global economic rebound next year. The economic optimism dulls gold’s safe-haven allure. Further, US banking giants – Citi and Goldman Sachs lowered their gold-price forecasts for 2021, which also collaborates with the weakness in the metal.
In the day ahead, gold could take cues from the second-tier US Pending Homes Sales data and sentiment on Wall Street.
Gold Price Chart - Technical outlook
Hourly chart
The hourly chart shows that gold could attempt a rebound from multi-month lows, as the Relative Strength Index (RSI) is heavily oversold at 25.46. The confluence of the daily high and bearish 21-hourly moving average (HMA) at $1790 could limit the bounce.
Overall, the risks remain skewed to the downside, as the price has breached the week-long descending trendline support at $1771. The next relevant downside target is seen at $1758, the July 2 high. The $1750 psychological level will be the level to beat for the bears.
- Economic optimism by vaccine progress hurts gold’s safe-haven allure.
- Gold’s 1H chart points to more pain but a bounce cannot be ruled out.
- Gold remains a good selling opportunity on recovery attempts.
Gold (XAU/USD) remains exposed to further downside risks heading into the critical NFP week this Monday, especially after the metal breached the $1800 threshold and closed the week below that level. Gold eroded 4.5% over the week while on track to book the worst month in four months. The spot has lost over $300 since it reached record highs of $2075 in August.
Early Monday, gold witnessed a fresh 15-pips drop and renewed four-month troughs at $1765, as the sell-off resumed amid ongoing optimism surrounding the coronavirus vaccine optimism, suggesting a swifter global economic rebound next year. The economic optimism dulls gold’s safe-haven allure. Further, US banking giants – Citi and Goldman Sachs lowered their gold-price forecasts for 2021, which also collaborates with the weakness in the metal.
In the day ahead, gold could take cues from the second-tier US Pending Homes Sales data and sentiment on Wall Street.
Gold Price Chart - Technical outlook
Hourly chart
The hourly chart shows that gold could attempt a rebound from multi-month lows, as the Relative Strength Index (RSI) is heavily oversold at 25.46. The confluence of the daily high and bearish 21-hourly moving average (HMA) at $1790 could limit the bounce.
Overall, the risks remain skewed to the downside, as the price has breached the week-long descending trendline support at $1771. The next relevant downside target is seen at $1758, the July 2 high. The $1750 psychological level will be the level to beat for the bears.
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