Gold Price Analysis: Despite the move back above $1700 the outlook is bearish in medium term

XAU/USD 4-hour chart

The price of gold has pushed higher today as the greenback capitulated once again. Although stocks have moved higher too this time. There has been another liquidity dump in the system by the ECB as today they announce an additional EUR 600bln. 

The structure of the gold chart is not as bullish as most of the indices but it is defiantly not as bearish as the dollar index. This leaves the precious metal in somewhat of a conundrum. The equity markets have seen a rotation into the stocks that fell the most during the COVID-19 pandemic (banks and airlines) and yields are starting to rise once again in the fixed income space.

Looking at the chart below there is still a lower high lower low pattern. If the USD 1750.00 per troy ounce level is broken then this pattern becomes obsolete and analysts can look for higher levels once more. Until that point, the Fib extensions on the downside could be the potential targets. 

At the moment the 200 Simple Moving Average is providing some resistance and the price is also under the 55 Exponential Moving Average. The Relative Strength Index indicator has pulled away from the oversold zone allowing some more space for another move to the downside. The MACD is still very much in bearish territory as the histogram is in the red and the signal lines are under the mid-point. 

Additional levels