Gold Price Analysis: Path of least resistance for XAU/USD remains to the downside

Gold failed to capitalize on a modest Asian session uptick to the $1735 region. As FXStreet’s Haresh Meghani notes, XAU/USD remains vulnerable to slide further.

Key quotes

“The Fed will announce its policy decision on Wednesday. A hawkish tilt could prove negative for the commodity. This, in turn, warrants some caution for aggressive bullish traders and positioning for any meaningful upside. In the meantime, the broader market risk sentiment, the US bond yields and the USD price dynamics will be looked upon for some trading opportunities.”

“Any downfall might continue to find decent support near the $1700 mark. Sustained weakness below now seems to accelerate the fall back towards multi-month lows, around the $1675 region. Some follow-through selling should pave the way for a slide towards the $1625 area with some intermediate support near the $1650 level.”

“Immediate resistance is pegged near the $1738-40 supply zone. Any subsequent positive move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near a previous strong horizontal support breakpoint, now turned resistance around the $1760-65.” 

“Only a sustained strength beyond the $1760-65 zone will negate the near-term bearish outlook and prompt some aggressive short-covering move.”