Gold Price Analysis: XAU/USD plummets to lows, fast approaching $1850-48 key support
- Gold witnessed some fresh selling on Wednesday and erased the overnight modest gains.
- The set-up favours bearish traders and supports prospects for an extension of the downfall.
- Sustained weakness below the $1850-48 region will add credence to the negative outlook.
Gold extended its intraday retracement slide from the $1884-85 region and refreshed daily lows during the early North American session. The commodity has now erased the previous day's modest recovery gains and was last seen trading just below the $1860 level.
The emergence of some fresh selling on Wednesday supports prospects for an extension of this week's sharp pullback from the $1965 congestion zone. That said, bearish traders might still wait for a sustained weakness below the $1950-48 horizontal support before placing fresh bets.
The mentioned region coincides with September monthly swing lows, which if broken decisively might prompt some aggressive technical selling. Meanwhile, technical indicators on the daily chart have just started drifting into the bearish territory and add credence to the negative outlook.
Hence, the XAU/USD now seems vulnerable to accelerate the fall further towards an intermediate support near the $1815-10 horizontal zone. The momentum could drag the precious metal further below the $1800 round-figure mark, towards challenging 200-day SMA, near the $1782-80 region.
On the flip side, the $1880 level now seems to act as immediate resistance and is closely followed by the overnight swing highs, around the $1890 level and the $1900 mark. Only a sustained move beyond the said barriers might negate the bearish set-up and trigger some short-covering bounce.
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.
