Gold Price Analysis: XAU free-fall to 1,750 seems inevitable

Gold to resume the downtrend at the opening on Monday; triangle breakdown could extend to 1,750.
Consolidation is likely if support above 1,900 remains intact.

John Isige FXStreet

Gold price closed the trading on Friday at $1,940.38 per ounce. The precious metal’s price action has since August 6, narrowed under a descending trendline. Apart from the dip to 1,862 on August 12, XAU/USD has established formidable support above 1,900. Subsequently, the price is trading within the apex of a descending triangle. If the ongoing rejection is not stopped at 1,900, there is a big chance that the breakdown will extend to support at 1,750.

XAU/USD 4-hour chart

The above bearish picture will be confirmed if the price drops below the 50 Simple Moving Average and the 100 SMA. Moreover, the Relative Strength Index (RSI) downward movement suggests that sellers have the upper hand. Retreat under the midline would cement the influence sellers have over the price at the opening on Monday.

However, the daily timeframe shows gold holding above the 50-day SMA. This moving average has been indicative of gold price continuing uptrend in the past. Therefore, if the price keeps above this moving average, there is a chance that XAU/USD will resume the uptrend, invalidating the bearish picture altogether.

XAU/USD daily chart

It is also essential to consider the possibility of consolidation taking precedence, mostly if support at 1,900 remains intact. The RSI in the daily range puts emphasis sideways trading taking over in the coming week.

Author

John Isige

FXStreet

John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Week ahead: Rate hike bets face a crucial data week

Despite the solid drop from the mid-September high, oil prices remained in the driver’s seat for another week, setting the tone in financial markets. Six months have passed since the late-February start of the US-Iran conflict, and there is still no breakthrough in the stalled talks, despite pressure from regional leaders and the rest of the world.

CFTC Report: Defensive currency positioning takes hold

The week in one sentence: Sterling and Euro shorts deepened in the week to September 22, while Yen longs were cut sharply. Oil positioning improved despite a steep price decline, and Gold exposure remained crowded. The main signal was a more defensive currency positioning backdrop.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.