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.
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
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.
