Gold Price Forecast: XAU/USD to recapture the $2,000 threshold after temporary relief to bears

Gold price has shot through the roof in a bid to retest the $2,000 level, extending its last week's uptrend. Bur as FXStreet’s Dhwanie Mehta notes, XAU/USD risks a correction before the next upswing kicks in above $2,000.

Overbought conditions on the 4H chart warrant cautious for gold bulls

“Having confirmed an upside breakout from a symmetrical triangle formation on the four-hour chart last Friday, gold is on track to achieve its pattern target at $2,034, as bulls briefly recapture the $2,000 mark. XAU/USD, however, could see an extension of the ongoing corrective downside, as the Relative Strength Index (RSI) on the said time frame is trading well within the overbought territory.”

“Further retracement in gold will call for a test of the previous month’s high of $1,975, below which the $1,950 psychological barrier could come into play. The next relevant downside target is seen at the upward-sloping 21-Simple Moving Average (SMA) at $1,946.”