Gold Price Analysis: XAU/USD finds decent support near 100-DMA, upside seems limited
- Gold continues to show resilience near 100-day SMA support, around the $1850-49 region.
- The technical set-up still favours bearish traders and supports prospects for further weakness.
- An attempted bounce might get sold into and remain capped near the $1900 support breakpoint.
Gold once again found some support near 100-day SMA, around the $1849 region and turned positive for the day amid a broad-based USD weakness.
The yellow metal shot to daily tops during the early North American session, albeit struggled to capitalize on the move beyond the $1877 resistance zone. The mentioned hurdle marks the top end of a three-day-old trading range, which if cleared decisively might trigger some short-covering move.
Given last week's sustained break below the $1900 horizontal support, the commodity's inability to register any meaningful recovery suggests that the selling bias might still be far from being over. The negative outlook is further reinforced by bearish technical indicators on the daily chart.
That said, traders might still wait for some follow-through selling below 100-DMA support, around the $1845 region, before positioning for any further depreciating move. The XAU/USD might then accelerate the fall towards the 61.8% Fibonacci level of the $1671-$2075 positive move, around the $1822 area.
On the flip side, sustained strength beyond the $1875-77 supply zone might trigger some short-covering move. However, the positive move might still be seen as an opportunity to initiate fresh bearish positions. This, in turn, might cap the upside near the $1900 strong support breakpoint.
Gold daily chart
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Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
