Gold Price News and Forecast: XAU/USD rejected above $1,950 despite bullish candlestick pattern

FXStreet Team FXStreet

Gold Price Forecast: XAU/USD bulls take a breather, await ECB for additional upside?

Gold (XAU/USD) closed higher for the second straight day on Wednesday, having staged a solid $30 bounce intraday. Gold bounced along with the US stocks amid improved market mood, which diminished the haven demand for the US dollar. The tech rally resumed after the recent correction, driving the Wall Street indices northwards. Further, the Bloomberg report citing that the European Central Bank (ECB) forecasts leak showed more confidence in the outlook boosted the euro at the expense of the greenback. Meanwhile, expectations that the US Congress will reach the much-awaited fiscal stimulus deal lifted the metal, as markets looked past news that AstraZeneca halted its vaccine trials over safety concerns.

Gold Price Analysis: XAU/USD rejected above $1,950 despite bullish candlestick pattern

Gold is trading near $1,945 at press time, representing a 0.10% decline on the day. The yellow metal closed Wednesday with 0.8% gains, marking a positive follow-through to Tuesday's Doji candle. In other words, the daily chart now shows a bullish Doji reversal pattern.

So far, however, that has failed to invite stong chart-driven selling. Gold faced rejection at $1,950 an hour ago and is currently trading in the red. Key support levels are located at $1,916 (50-day SMA) and $$1,906 (Tuesday's low). Meanwhile, resistance levels are seen at $1,950 (session high) and $1,978 (trendline falling from Aug. 18 and Sept. 1 highs).

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