Gold Price Analysis: XAU/USD set to test 7-year highs amid lack of healthy resistance levels

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  • Gold looks to break Friday’s range trade to the upside.
  • Falling trendline hurdle at $1776.60 is the level to beat for the bulls.
  • XAU/USD closed above all major hourly Simple Moving Averages (HMA).

Following consolidation in a $5 range on holiday-thinned Friday, Gold prices (XAU/USD) are poised for another leg higher after falling off the seven-year tops of $1789.28 last Wednesday.

With looming concerns over a surge in the coronavirus cases worldwide and economic recovery unlikely to wane, gold could likely continue drawing the haven bids in the near-tern.

Although the ongoing optimism on the global stocks could slowdown the yellow metal’s advances towards the $1800 mark.

Technically, looking at the hourly chart, gold is set to break through the falling trendline resistance aligned at $1776.60, also where Friday’s high converges.

Acceptance above the latter could see a test of the multi-year high. The hourly Relative Strength Index (RSI) points northwards at 56.05, hinting at more room for the upside.

Also, the fact that the price closed above the 21-HMA at $1775.45 adds credence to the near-term bullish outlook. Its worth noting that the XAU bulls have regained ground above all the major HMAs.

On the flip side, the immediate downside could be capped by the 21-HMA, below which the next support awaits at the horizontal 100-HMA at $1774.64.

Further south, the 50-HMA at $1772.93 is likely to offer some temporary reprieve to the bulls while the 200-HMA at $1770.36 is the level to beat for the bears in the coming days.

All in all, the path of least resistance appears to the upside amid a lack of healthy resistance levels.

Gold: Hourly chart

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Gold: Additional levels

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