Gold Price Analysis: XAU/USD hangs near 2-month lows, bears await a break below 100-DMA
- Resurgent USD demand exerted some fresh pressure on the dollar-denominated commodity.
- The set-up favours bearish traders and supports prospects for further near-term weakness.
- Any attempted recovery might continue to confront stiff resistance near the $1875-78 area.
Gold failed to capitalize on the previous day's modest rebound from the vicinity of 100-day SMA support, instead met with some fresh supply on Friday. The emergence of some fresh USD buying weighed on the dollar-denominated commodity and dragged it back closer to two-month tops touched in the previous session.
Given this week's breakdown through the $1900 horizontal support, the precious metal's inability to register any meaningful recovery suggests that the recent bearish pressure might still be far from being over. The negative outlook is further reinforced by bearish technical indicators on the daily chart.
Adding to this, the fact that XAU/USD has now found acceptance below the 50% Fibonacci level of the $1671-$2075 positive move supports prospects for further weakness. That said, traders might still wait for some follow-through selling below 100-DMA support, around the $1845 region, before positioning for a fall towards 61.8% Fibo. level, around the $1822 area.
On the flip side, the $1875-77 region now seems to have emerged as immediate strong resistance. A sustained strength beyond might trigger some short-covering move and pushed the XAU/USD back closer to the $1900 strong support breakpoint.
Gold daily chart
-637366370441386564.png)
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.
