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Gold is licking its wounds but remains below $1,700. According to FXStreet’s Haresh Menghani, the underlying bullish sentiment in the financial markets should hold bullish traders from placing any aggressive bets and cap the upside for the safe-haven XAU/USD.  

More –  Gold Price Analysis: XAU/USD bearish trend intensifies –  OCBC

Key quotes

“The global risk sentiment remained well supported by the optimism over a strong global economic recovery amid the impressive pace of COVID-19 vaccinations and the continuous decline in new cases. This, in turn, suggests that the path of least resistance for the commodity remains down and any meaningful recovery attempt might still be seen as an opportunity to initiate fresh bearish positions.”

“The yellow metal still seems vulnerable to prolong its recent bearish trajectory and aim to test the next relevant support near the $1630-25 region. The downward momentum could further get extended and drag the metal further toward the $1600 round-figure mark.”

“Any meaningful recovery beyond the $1700 mark might now confront some resistance near the overnight swing highs, around the $1714 region. This is followed by the $1722-23 supply zone, which if cleared decisively might trigger some short-covering bounce. The commodity might then climb back to the $1738-40 hurdle before eventually aiming to challenge the $1765-60 strong horizontal support breakpoint, now turned resistance.”