Gold Price Analysis: XAU/USD drops further to test $1850 on another sell-off

XAU/USD falls by almost 3% on Friday, falls $100 from weekly highs.
US dollar up marginally on a relatively quiet session among currencies.

Matías Salord FXStreet

Gold dropped further and bottomed at $1849, hitting the lowest level since December 16. The area around $1850 offered supported and as of writing the metal trades at $1856, down by 2.80% on the day and more than a hundred dollar below the weekly high it reached on Wednesday.

The sharp reversal in gold accelerated on Friday after the breakout below $1900. Initially, the area at $1875 capped the decline and after a minor bounce, another sell-off following the US employment report it tumbled further.

The technical outlook has changed dramatically for gold. Now, attention is set on the $1850 area, and a consolidation below would keep the bearish pressure intact. The next support levels are seen at $1840 and $1820.

XAU/USD continues to be on the defensive. A recovery above $1875 would alleviate the pressure and only a rebound back above $1900 could change the bias.

On a weekly basis, gold is about to post a decline of around 3% and a close consolidating a sharp reversal, pointing to further weakness. The ongoing decline followed the failure at $1960 days ago.

Technical levels

XAU/USD

Overview
Today last price	1856.6
Today Daily Change	-56.92
Today Daily Change %	-2.97
Today daily open	1913.52

Trends
Daily SMA20	1884.55
Daily SMA50	1869.55
Daily SMA100	1893.22
Daily SMA200	1838.13

Levels
Previous Daily High	1927.76
Previous Daily Low	1906.96
Previous Weekly High	1901.02
Previous Weekly Low	1869.32
Previous Monthly High	1906.87
Previous Monthly Low	1775.52
Daily Fibonacci 38.2%	1914.91
Daily Fibonacci 61.8%	1919.81
Daily Pivot Point S1	1904.4
Daily Pivot Point S2	1895.28
Daily Pivot Point S3	1883.6
Daily Pivot Point R1	1925.2
Daily Pivot Point R2	1936.88
Daily Pivot Point R3	1946

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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