Gold Price Analysis: Strong support for XAU/USD is located at $1,680

Gold closed the third straight week in the negative territory near $1,700 and lost around 2%. As FXStreet’s Eren Sengezer notes, XAU/USD remains vulnerable unless it manages to reclaim the $1,760 level.

Key quotes

“On Wednesday, February Consumer Price Index (CPI) data from the US will be looked upon for fresh impetus. Experts expect the Core CPI to remain unchanged on a yearly basis at 1.4%. A stronger-than-expected reading is likely to help the USD outperform its rivals and weigh on XAU/USD.” 

“On Thursday, the European Central Bank (ECB) will announce its Interest Rate Decision and publish the monetary policy statement. The ECB is not expected to make any changes to its policy rate but some experts think that it could ramp up the pace of its Pandemic Emergency Purchase Programme (PEPP) purchases. In any case, changes to the USD's market valuation after this event could impact gold's movements.”

“On the upside, the initial static resistance is located at $1,740. Above that level, the next static hurdle, which is reinforced by the descending line, could be seen at $1,760 ahead of $1,780 (20-day SMA).”

“Supports are located at $1,687 (multi-month lows set on Friday), $1,680 (strong static level from April, May and June of 2020) and $1,670 (June 1, 2020, low).”