Gold Price Analysis: XAU/USD slides to fresh six-week lows, around $1875 region

Gold witnessed some follow-through selling for the third consecutive session on Wednesday.
Sustained USD buying was seen as a key factor weighing on the dollar-denominated commodity.
A positive tone around the equity markets further undermined the safe-haven precious metal.

Haresh Menghani FXStreet

Gold continued losing ground through the early European session and dropped to fresh six-week lows, around the $1875 region in the last hour.

Concerns about the second round of coronavirus infections continued boosting the US dollar's status as the global reserve currency. This, in turn, was seen as one of the key factors that undermined the dollar-denominated commodity and some follow-through weakness for the third consecutive session on Wednesday.

Adding to this, the prevalent positive tone around the equity markets further dented the precious metal's safe-haven status. The downtick also marked the fourth day of a negative move in the previous five and could further be attributed to some technical selling on a sustained weakness below the $1900 horizontal support.

From a technical perspective, the commodity now seems to have confirmed a near-term bearish breakthrough a descending triangle. Hence, some follow-through weakness back towards August monthly swing lows, around the $1863-62 region, now looks a distinct possibility.

Market participants now look forward to the release of the flash version of the US Manufacturing and Services PMI. This, along with the Fed Chair Jerome Powell's second day of the congressional testimony will influence the USD price dynamics and produce some meaningful trading opportunities around the non-yielding yellow metal.

Technical levels to watch

XAU/USD

Overview
Today last price	1877.6
Today Daily Change	-22.57
Today Daily Change %	-1.19
Today daily open	1900.17

Trends
Daily SMA20	1943.11
Daily SMA50	1939.07
Daily SMA100	1840.53
Daily SMA200	1719.01

Levels
Previous Daily High	1920.04
Previous Daily Low	1894.79
Previous Weekly High	1973.64
Previous Weekly Low	1932.88
Previous Monthly High	2075.32
Previous Monthly Low	1863.24
Daily Fibonacci 38.2%	1904.44
Daily Fibonacci 61.8%	1910.39
Daily Pivot Point S1	1889.96
Daily Pivot Point S2	1879.75
Daily Pivot Point S3	1864.71
Daily Pivot Point R1	1915.21
Daily Pivot Point R2	1930.25
Daily Pivot Point R3	1940.46

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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