Gold Price Analysis: XAU/USD upside attempts fails right below $1,900
- Gold recovery remains limited below $1,900 area.
- XAU/USD has been buoyed by USD weakness with risk appetite picking up.
Gold futures have attempted to shrug off the bearish pressure suffered earlier this week to stage a moderate pick up on Thursday and Friday. The yellow metal, however, has been unable to extend its recovery beyond $1,896 in a cautious market atmosphere.
Gold, attempting to set a bottom at $1,850
XAU/USD has ticked higher on Friday, in an attempt to breakthrough the three-day consolidation period that followed Monday's 4.5% sell-off. News reporting that the COVID-19 vaccine developed by Pfizer was 90% effective boosted appetite for risk at the week’s opening and sent gold futures tumbling.
Bullion prices dropped to $1,850 later on, where they found support at four-month lows, to consolidate below $1,880/90 during the last three days. Gold remained moving sideways with risk sentiment fading as fears about the economic consequences of the second COVID-19 wave have offset hopes about the progress on the vaccine.
From a technical point of view, XAU/USD should stage a clear breach of $1,900/05 area, extending past the confluence of the 50 and 100-day SMAs. This might increase bullish traction to attack $1,965/70 (September 16, November 6 highs) and $1,990 (September 1 low).
On the downside, any further decline below $1,850 (November 9 low, late September lows) would provide a fresh impulse to the bears and might drive gold prices towards $1,790 (mid-July lows and the 200-day SMA) and $1,750 (June 26 low)
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
