Gold Price Analysis: XAU/USD flat around $1,900 approaching the tip of a triangle pattern

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  • Gold futures have remained practically flat around $1,900.
  • XAU/USD is approaching the tip of a triangle pattern.

Gold’s futures have remained moving directionless within a tight range, both sides of $1,900 on Monday. The precious metal is approaching the tip of a triangle pattern that has been shaping over the last four weeks

Bullion prices have been trading within a $10 range, between $1,898 and $1,908 on a risk-off session, with the USD outperforming its main peers on growing concerns about the global increase of COVID-19 cases.

A record of infections in the US and France and the tighter restrictions in Spain and Italy to attempt to curb the second wave of the pandemic has crushed risk appetite on Monday boosting demand for the safe-haven USD. The upbeat news from Oxford/AstraZeneca, whose vaccine has shown a strong immune response on elderly patients has failed to improve the mood.

Gold prices forming a triangle pattern

From a technical point of view, daily charts show XAU/USD posting higher lows and low tops over the last four weeks, forming a triangle shape that is reaching its tip.

On the downside, immediate support would be in the $1,895/00 area, where the October 22 and 23 lows and the base of the triangle lie. A clear breach of this level might push the pair towards $1,885 (100-day SMA and October 14 low) and $1,850 (late September lows).

On the upside, a bullish reaction might find resistance at the confluence of the 50-day SMA with the top of the triangle; the downward trendline from mid-August highs, now at $1,920. A confirmation above here might give confidence to the bulls to test $1,934 (October 12 high) ahead of $1,975 (mid-September highs).

XAU/USD daily chart

XAUUSD daily chart

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