Gold Price Forecast: Sellers still willing to add shorts around critical Fibonacci resistance


XAU/USD Current price:  $1,760.50

  • The IMF downgraded its global growth forecast amid supply disruption and increasing financial risk.
  • US government bond yields ticked lower as Wall Street suffered another setback.
  • XAU/USD is technically neutral and confined to familiar Fibonacci levels.

Spot gold surged this Tuesday to an intraday high of $1,768.52 a troy ounce, later retreating to the current  $1,760 price zone. The bright metal advanced ahead of Wall Street’s opening amid a sour market mood, retreating afterwards as Wall Street managed to shrug off the dismal sentiment and advanced into positive territory, although it was unable to retain gains.

The International Monetary Fund downgraded its global growth forecast, after “seeing major supply disruptions around the world that are also feeding inflationary pressures, which are quite high and financial risk taking also is increasing, which poses an additional risk to the outlook.” For sure, as the same issues have been worrying speculative interest in the last few weeks.

Meanwhile, US government bond yields ticked lower, although held within familiar levels after an extended weekend.

Gold price short-term technical outlook

From a technical point of view, XAU/USD remains confined to familiar levels. The daily chart shows that it is currently above a firmly bearish 20 SMA, hovering around it since late September. Technical indicators have recovered some ground, now directionless within neutral levels. At the same time, gold is unable to clear a Fibonacci resistance level at 1,764.35, the 38.2% retracement of its latest daily decline.

In the near term, and according to the 4-hour chart, gold stands above its 20 and 100 SMAs while below the 200 SMA, all of them lacking directional strength. Meanwhile, technical indicators have exhibited some short-lived strength but quickly returned to neutral levels. Gold needs to clear the 1,777.75 resistance level to gain bullish traction, while bears may take over on a clear break below 1,748.05, the 23.6% retracement of the mentioned decline.

 Support levels: 1,748.05 1,735.26 1,721.60

Resistance levels: 1,764.35 1,777.75 1,787.30

View Live Chart for the XAU/USD

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