- Gold witnessed some intraday recovery from one-month lows touched earlier this Monday.
- The lack of any strong follow-through buying suggests that the downtrend is still not over.
- Any meaningful strength beyond the $1860 hurdle might be seen as a selling opportunity.
Gold stalled its recent bearish slide to over one-month lows and staged a goodish intraday bounce from the vicinity of the $1820 support area. The commodity was last seen oscillating in a narrow trading band around the $1850 region, nearly unchanged for the day.
Given Friday’s bearish break below rising wedge support, the near-term bias seems tilted in favour of bearish traders. Moreover, the commodity’s inability to capitalize on the attempted recovery suggests that the downtrend might still be far from being over.
Meanwhile, technical indicators on the daily chart have just started drifting into the negative territory and add credence to the negative outlook. Hence, any subsequent recovery might still be seen as an opportunity to initiate fresh bearish positions.
The XAU/USD seems vulnerable to break through the $1820 congestion zone and challenge the $1800 mark. Some follow-through selling has the potential to drag the commodity further towards late-November swing lows support, around the $1764 region.
On the flip side, any meaningful strength beyond the $1860-62 immediate resistance is likely to confront a stiff resistance and fizzle out near the $1885 horizontal resistance. This, in turn, should cap the XAU/USD near the $1900 round-figure mark.
XAU/USD 4-hourly chart
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Technical levels to watch
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