Gold Price Analysis: XAU/USD still eyes June 2020 lows at $1670 after weekly closing below $1700
- Weekly closing below $1700 keeps the XAU/USD sellers hopeful.
- A bounce towards 50-SMA on 4H cannot be ruled out in the near-term.
- RSI stays bearish while gold holds within a potential falling wedge.
Gold (XAU/USD) settled Friday almost unchanged below the $1700 mark, recovering from nine-month lows of $1687 reached earlier in the day.
A doji candlestick formed on the daily chart on Friday seemingly points to seller exhaustion, which suggests a rebound could be in the offing if the price of gold manages to find its feet above the $1700 mark.
Looking at the four-hour chart, the XAU bulls have well-defended the falling wedge support at $1681, which has helped them to stage a modest comeback.
A falling wedge breakout would be confirmed on a four-hour candlestick closing above the $1707 level.
The recovery from multi-month lows could gain further traction if the bearish 21-simple moving average (SMA) at $1713 is cleared on a sustained basis.
The gold buyers could then target the downward-sloping 50-SMA at $1742 on their road to recovery.
The Relative Strength Index (RSI) is on a steady recovery from near the oversold region, which also suggests a bounce could be on the cards in the near-term.
Gold Price Chart: Four-hour
If the XAU bears defy the bullish continuation pattern and prompt the price to yield a downside break below the key $1681 support, the June 2020 low at $1760 will be back on the sellers’ radar.
The last line of defense for the bulls is seen at $1750, the psychological barrier.
Gold Additional levels
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Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
