Gold Price Forecast: XAU/USD is unlikely to stage a substantial recovery

Will gold price sustain the comeback from multi-week troughs? XAU/USD’s technicals are pointing to further downside potential, as FXStreet’s Dhwani Mehta notes.

XAU/USD is pointing to drops in the short and medium terms

“Friday will bring in the all-important US labor market report, with the headline NFP foreseen at 500K in September vs. August’s terrible print of 235K. The NFP data will be closely eyed, as it will indicate ‘clear’ progress of Fed’s maximum employment goal.” 

“XAU/USD is trading below a downtrend resistance since mid-September and has dropped below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs). Momentum is to the downside and the Relative Strength Index (RSI) is well above 30 – thus allowing for more falls.”

“Support awaits at $1,720, which was September's trough, and also cushioned the precious metal back in April. It is followed by August's swing low of $1,690. Close by, $1,680 is of interest.” 

“Resistance awaits at the early October high of $1,760, followed by $1,785 and $1,810.”