Gold Price Analysis: Trades with modest losses, downside seems limited

Gold edged lower on the first day of a new trading week amid the upbeat market mood.
The downtick lacked any strong follow-through and the metal held above $1722 support.
Mixed oscillators warrant some caution before placing any aggressive directional bets.

Haresh Menghani FXStreet

Gold traded with a mild negative bias through the mid-European session amid the prevalent risk-on mood, albeit has managed to defend the $1722 horizontal support.

Looking at the broader picture, the recent move up has been along a two-month-old upward sloping channel. This coupled with the fact that technical indicators on the daily chart are holding in the bullish territory supports prospects for a further near-term appreciating move.

However, oscillators on hourly charts have been struggling to gain any meaningful traction. The set-up – though seems tilted in favour of bullish traders – warrants some caution before positioning aggressively for any meaningful appreciating move amid stronger USD.

Meanwhile, a convincing break below the mentioned support might prompt some aggressive technical selling and turn the commodity vulnerable to accelerate the fall further towards challenging the trend-channel support, currently near the $1710 region.

On the flip side, Friday's swing high, around the $1740 level, now seems to act as immediate resistance and is followed by the $1755 level. Above the mentioned barrier, the commodity is likely to aim back to retest multi-year tops, around the $1765 region.

The momentum could further get extended and lift the yellow metal further towards the top end of the trend-channel, currently near the $1775-76 region, en-route the $1800 round-figure mark.

Gold 4-hourly chart

Technical levels to watch

XAU/USD

Overview
Today last price	1728.12
Today Daily Change	-6.10
Today Daily Change %	-0.35
Today daily open	1734.22

Trends
Daily SMA20	1715.66
Daily SMA50	1663.44
Daily SMA100	1626.42
Daily SMA200	1559.69

Levels
Previous Daily High	1740.43
Previous Daily Low	1724.46
Previous Weekly High	1765.38
Previous Weekly Low	1717.34
Previous Monthly High	1747.82
Previous Monthly Low	1568.46
Daily Fibonacci 38.2%	1734.33
Daily Fibonacci 61.8%	1730.56
Daily Pivot Point S1	1725.64
Daily Pivot Point S2	1717.07
Daily Pivot Point S3	1709.67
Daily Pivot Point R1	1741.61
Daily Pivot Point R2	1749.01
Daily Pivot Point R3	1757.58

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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