Gold Price Analysis: XAU/USD up 0.5% in Asia, but gains could be short-lived

Gold's 4-hour chart shows the price bounce from $1,863 has ended.
Short-term charts favor a retest of the psychological support of $1,900.

Omkar Godbole FXStreet Contributor

Gold is currently trading around $1,937 per ounce, representing a 0.5% gain on the day.

The moderate gains seen at press time could be short-lived, as the US dollar, the biggest nemesis of gold, is witnessing an oversold bounce. The greenback picked up a bid on Wednesday after Federal Reserve’s July meeting minutes dashed hopes for additional measures like yield curve control.

In addition, short duration charts have turned bearish, courtesy of Wednesday’s 3.67% decline, which violated the trendline rising from Aug. 12 and Aug. 16 lows. The downside break of the trendline is backed by a below-50 or bearish reading on the 4-hour chart relative strength index (RSI) and indicates that the bounce from the recent low of $1,863 has ended.

Wednesday’s drop has also established a lower high on the daily chart – the first since September 2019.

The odds, therefore, appear stacked in favor of decline to the psychological support of $1,900, which, if breached, would expose the low of $1,863 reached on Aug. 12. On the higher side, the newly created lower high of $2,015 is the level to beat for the bulls.

Daily chart

Trend: Bearish

Technical levels

XAU/USD

Overview
Today last price	1943.05
Today Daily Change	13.89
Today Daily Change %	0.72
Today daily open	1929.16

Trends
Daily SMA20	1969.87
Daily SMA50	1855.01
Daily SMA100	1779.49
Daily SMA200	1662.04

Levels
Previous Daily High	2006.73
Previous Daily Low	1924.83
Previous Weekly High	2049.96
Previous Weekly Low	1863.24
Previous Monthly High	1984.8
Previous Monthly Low	1757.7
Daily Fibonacci 38.2%	1956.12
Daily Fibonacci 61.8%	1975.44
Daily Pivot Point S1	1900.42
Daily Pivot Point S2	1871.67
Daily Pivot Point S3	1818.52
Daily Pivot Point R1	1982.32
Daily Pivot Point R2	2035.47
Daily Pivot Point R3	2064.22

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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