Gold Price Analysis: XAU/USD bears turn cautious near descending channel support

  • Gold failed to preserve its early gains and refreshed daily lows in the last hour.
  • Sustained USD buying was seen as a key factor exerting pressure on the metal.
  • Oversold conditions on the daily chart warrant some caution for bearish traders.

Gold struggled to capitalize its modest intraday recovery gains, instead met with some fresh supply near the $1721 region. The commodity refreshed daily lows, around $1707-06 region in the last hour and remained well within the striking distance of nine-month lows touched on Wednesday.

The US dollar buying picked up pace since the early European session, which, in turn, was seen as a key factor exerting downward pressure on the dollar-denominated commodity. A softer risk tone around the equity markets and the US bond yields might help limit losses for the XAU/USD.

From a technical perspective, the commodity has been trending lower along a downward sloping channel over the past one month or so. The formation points to a well-established short-term bearish trend and supports prospects for an extension of the ongoing downward trajectory.

That said, the XAU/USD, so far, has managed to defend the $1700 mark, which coincides with the lower boundary of the mentioned channel. Moreover, technical indicators on the daily chart are flashing oversold conditions and warrants some caution for bearish traders.

This makes it prudent to wait for sustained breakthrough the channel support before positioning for any further depreciating move. The XAU/USD might then accelerate the fall towards testing the $1675-70 horizontal support en-route the next major support near mid-$1600s.

On the flip side, the daily swing highs, around the $1721-23 region now seems to act as an immediate hurdle. This is followed by resistance near the $1740 supply zone, which if cleared might trigger a short-covering move towards the $1760-65 strong support breakpoint.

Only a sustained move beyond will negate the near-term bearish outlook and push the XAU/USD back towards the $1800 mark. However, any subsequent positive move is more likely to remain capped near the trend-channel resistance, currently around the $1809-10 region.

XAU/USD daily chart


Technical levels to watch


Today last price 1710.56
Today Daily Change -3.80
Today Daily Change % -0.22
Today daily open 1714.36
Daily SMA20 1789.47
Daily SMA50 1836.41
Daily SMA100 1852.73
Daily SMA200 1860.38
Previous Daily High 1740.6
Previous Daily Low 1702
Previous Weekly High 1816.07
Previous Weekly Low 1717.24
Previous Monthly High 1871.9
Previous Monthly Low 1717.24
Daily Fibonacci 38.2% 1716.75
Daily Fibonacci 61.8% 1725.85
Daily Pivot Point S1 1697.37
Daily Pivot Point S2 1680.39
Daily Pivot Point S3 1658.77
Daily Pivot Point R1 1735.97
Daily Pivot Point R2 1757.59
Daily Pivot Point R3 1774.57



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Stop losing your money! 
Learn to trade with us!

24/7 signals + Webinars    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD drops below 1.1900 as dollar rebounds amid risk-aversion

EUR/USD is trading below 1.1900, retreating further from two-week highs of 1.1927 amid resurgent haven demand for the US dollar whilst the Treasury yields recover. Concerns about vaccines in Europe outweigh the Fed's dovish message.


GBP/USD struggles around 1.37 on dollar strength, Brexit and covid concerns

GBP/USD is trying to hold onto 1.37, trading near the March lows. The US dollar is rebounding the from dovish Fed-induced blow. Concerns about Britain's vaccine supplies and Brexit-related issues are weighing on sentiment.


XAU/USD trades as a function of yields, bounces at $1730 support

Spot gold (XAU/USD) prices have seen choppy price action this Friday, dropping from Asia Pacific levels in the upper-$1750s to lows around $1730, before recovering back to the mid-$1740s in recent trade. 

Gold News

Cardano’s Alonzo update might catalyze ADA price for 78% upswing

IOHK revealed Alonzo, the next protocol update for the Cardano blockchain. The upgrade will build on top of the recent releases like Mary, Allegra and so on to bring smart contract capabilities. ADA price falters but holds up as buyers eye a 78% bull run to record levels.

Read more

S&P 500: High high and away, it's the running of the bulls as PPI Freezes up

Up up and away as bulls push more record highs in equity markets. In the short term nothing, it appears, is clouding the picture. Or is it! The ten year yield reawakens with a fairly sharp rise back toward 1.7%.

Read more