Gold Price Analysis: Drops 1%, bearish RSI divergence on 1H chart

Gold drops alongside losses in the US stock futures.
The number of coronavirus cases surges in China.
Gold's hourly chart suggests scope for a deeper price pullback.

Omkar Godbole FXStreet Contributor

Gold is flashing red on Monday despite the renewed coronavirus concerns and signs of risk-off in the US stock futures.

The yellow metal is trading at $1,682 per ounce, representing a 1% drop on the day, having faced rejection at $1,690 during the early Asian trading hours.

China reported 99 new coronavirus cases on Saturday, the highest in recent weeks, according to The Economic Times. Further, the number of new cases rose to 108 on Sunday, taking the nationwide tally to 82,160, according to William Yang, East Asia correspondent for DW.

The surge in new cases seems to be weighing over the S&P 500 futures, which are currently down 1.7%.

Gold, a classic haven asset, could continue to ignore the risk-off in the US index futures, as the yellow metal's hourly chart is reporting a bearish divergence of the relative strength index, which occurs when the indicator prints lower highs as opposed to higher highs.

The bearish divergence is widely considered an early sign of bearish reversal and would gain credence if the immediate horizontal support at $1,678 is breached. That would expose the 50-hour average, currently at $1,660.

On the higher side, a convincing move above $1,690 would revive the immediate bullish setup.

Hourly chart

Trend: Bearish

Technical levels

XAU/USD

Overview
Today last price	1683.68
Today Daily Change	-0.66
Today Daily Change %	-0.04
Today daily open	1684.34

Trends
Daily SMA20	1587.32
Daily SMA50	1599.54
Daily SMA100	1556.37
Daily SMA200	1519.05

Levels
Previous Daily High	1690.42
Previous Daily Low	1643.82
Previous Weekly High	1690.42
Previous Weekly Low	1609.15
Previous Monthly High	1703.27
Previous Monthly Low	1451.3
Daily Fibonacci 38.2%	1672.62
Daily Fibonacci 61.8%	1661.62
Daily Pivot Point S1	1655.3
Daily Pivot Point S2	1626.26
Daily Pivot Point S3	1608.7
Daily Pivot Point R1	1701.9
Daily Pivot Point R2	1719.46
Daily Pivot Point R3	1748.5

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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