Search ForexCrunch
  • XAU/USD is posting modest gains following Wednesday’s upsurge.
  • $1,725 aligns as a key resistance in the near-term.
  • A daily close below $1,700 could attract sellers.

Following the sharp decline witnessed earlier in the week, the XAU/USD pair rose sharply on Wednesday and gained more than 1%. With the 10-year US Treasury bond yield staying in the negative territory on Thursday, the pair continued to edge higher but struggled to climb above $1,720 and was last seen gaining 0.33% on the day at $1,713.

Gold technical outlook

On the four-hour chart, the Relative Strength Index (RSI) indicator retreated toward 50 following the rejection at $1,720, suggesting that the bullish momentum has eased somewhat. That static resistance is also reinforced by the 50-period SMA. If gold manages to break above that level, the next hurdle is located at $1,725 (100-period SMA, former support) ahead of $1,735 (starting point of the five-day drop witnessed in late March).

On the flip side, key support is located at $1,700 (psychological level). As long as XAU/USD stays afloat above that level, sellers could opt-out to remain on the sidelines. A daily close below that support, however, could trigger another technical selloff and drag the price to $1,680, where the cycle low is located.

Additional levels to watch for