- Gold witnessed some selling for the second straight session on Wednesday.
- The downfall seems to have confirmed a break below a bearish flag pattern.
- The stage seems set for a slide back towards testing the $1950-48 support.
Gold extended this week’s rejection slide from the vicinity of the $1900 mark and remained depressed for the second consecutive session on Wednesday. The intraday selling bias picked up pace during the European session and dragged the commodity to fresh weekly lows, around the $1863 region in the last hour.
The downward trajectory confirmed a near-term bearish break below a short-term ascending trend-channel, which constitutes the formation of a bearish continuation flag chart pattern. With technical indicators on hourly/daily charts holding in the bearish territory, the XAU/USD now seems vulnerable to slide further.
The momentum could now get extended back towards testing horizontal support near the $1850-48 area. Some follow-through selling will be seen as a fresh trigger for bearish traders and pave the way for a fall towards the $1820-15 intermediate support. The XAU/USD could eventually drop to the very important 200-day SMA support, or sub-$1800 levels.
On the flip side, immediate resistance is pegged near the $1888-90 region and is closely followed by the $1900 mark ahead of the trend-channel barrier, around the $1910 region. Only a sustained strength beyond the mentioned hurdles will negate the bearish outlook and trigger some near-term short-covering move around the metal.
The XAU/USD might then aim to surpass the $1930-32 intermediate resistance zone and challenge the next major obstacle near the $1952 region en-route monthly swing highs near the $1965 area.
Gold 4-hourly chart
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Technical levels to watch
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