Gold Price Analysis: XAU/USD’s sell-off finds support at the $1,850 level

• XAU/USD sells off more than $100 to hit $1,850 low
• Gold plummets on hopes of a COVID-19 vaccine 
• XAU/USD’s decline has been contained at mid-term lows.

Gold futures have plunged beyond $100 on Monday, to find support at $1,850 where the yellow metal has managed to stage a mild recovery attempt and return to $1,865 area.

XAU/USD has stager its sharpest sell-off in seven years after the drugmaker Pfizer announced that the first analyses of its coronavirus vaccine show that it is 90% effective. The better than expected success level has boosted risk appetite, sending equity markets and US Treasury Bond yields surging.

XAU/USD finds support at $1,850 mid-term lows

Bullion’s slump from session highs at $1,960 has been contained at $1,850 (later-September lows).  A successful breach of that level would open the path towards $1,795 (mid-July lows) and finally $1,760, the 50% Fibonacci Retracement of the March – July rally.

On the upside, bullish reactions are likely to find resistance between  $1,900 and $1,910 psychological level and the confluence of the 50 and 100-day SMAS. Once above here, bearish pressure would ease and gold prices might attempt a retest of $1,960 (intra-day high) and $1,995 (September 1 high).

XAU/USD daily chart

Technical levels to watch