Gold price is trading on a slippery slope. In the view of FXStreet’s Dwhani Mehta, XAU/USD looks to extend range play above $1,650.

Lackluster action but downside bias intact

“Gold has continued to find strong buyers around the $1,655 region so far this week but sellers continue to lurk above $1,680, leaving the bullion directionless in a defined range. The range play is likely to extend on the final trading day of the week, as bears await a fresh catalyst for the next leg lower.”

“Sellers need to find a strong foothold below the 2022 low of $1,654 to challenge the $1,650 psychological level. A fresh downtrend will kick in on a sustained breach of the latter, with a test of the $1,600 mark inevitable going forward.”

“Conversely, the immediate upside is guarded by the falling trendline resistance at $1,679. Any recovery attempts will need acceptance above the recent range highs near $1,685. The next line of defense for sellers is placed at around $1,700. At that level, the bearish 21-Daily Moving Average (DMA) collides. Further up, bulls will then aim for the September 14 high of $1,707.”

 

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