Gold Price Analysis: XAU/USD recovers from multi-month lows, remains vulnerable

Gold staged a modest intraday bounce from multi-month lows amid a softer risk tone.
Slightly oversold conditions extended some support to the safe-haven commodity.
The attempted recovery might still be seen as an opportunity for bearish traders.

Haresh Menghani FXStreet

Gold managed to recover the early lost ground to fresh nine-month lows and has now climbed to the top end of its daily trading range, around the $1727-28 region.

A softer risk tone – as depicted by a weaker trading sentiment around the equity markets – was seen as a key factor that extended some support to the safe-haven XAU/USD. However, sustained US dollar buying kept a lid on any meaningful recovery for the dollar-denominated commodity.

From a technical perspective, oversold conditions on short-term charts seemed to be the only factor that assisted the XAU/USD to find some support near the $1707 region. That said, the bias remains tiled in favour of bearish traders and supports prospects for further weakness.

The overnight rejection near the $1960-65 support-turned-resistance and the lack of any meaningful buying interest adds credence to the negative outlook. Hence, any further recovery might still be seen as an opportunity to initiate fresh bearish positions around the XAU/USD.

From current levels, immediate resistance is pegged near the $1740 region, above which a fresh bout of short-covering has the potential to lift the XAU/USD towards the $1754-55 hurdle. This is followed by the $1760-65 strong barrier, which should cap any further upside.

On the flip side, weakness back below the $1710-08 immediate support will reaffirm the bearish bias and accelerate the fall towards the $1700 mark. The downward trajectory could eventually drag the XAU/USD further to the next major support near the $1675-70 region.

XAU/USD 4-hourly chart

Technical levels to watch

XAU/USD

Overview
Today last price	1727.2
Today Daily Change	3.44
Today Daily Change %	0.20
Today daily open	1723.76

Trends
Daily SMA20	1800.54
Daily SMA50	1842.14
Daily SMA100	1856.19
Daily SMA200	1860.25

Levels
Previous Daily High	1759.98
Previous Daily Low	1719.72
Previous Weekly High	1816.07
Previous Weekly Low	1717.24
Previous Monthly High	1871.9
Previous Monthly Low	1717.24
Daily Fibonacci 38.2%	1735.1
Daily Fibonacci 61.8%	1744.6
Daily Pivot Point S1	1708.99
Daily Pivot Point S2	1694.23
Daily Pivot Point S3	1668.73
Daily Pivot Point R1	1749.25
Daily Pivot Point R2	1774.75
Daily Pivot Point R3	1789.51

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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