- Gold is in the middle of a downtrend as far as the RSI is concerned.
- XAU/USD has the potential breakout to highs above 2,000.
The world’s precious metal has been trading a lower high and a lower low pattern for the past two days. A descending trendline continues to limit the upside. This week’s barrier at 1,966 prematurely paused the well-orchestrated mission to hit highs above $2,000 per ounce.
Rejection at 1,966 sent XAU/USD spiraling into the support between 1,940 -1,935. According to the Relative Strength Index (RSI), gold is likely to continue with Monday’s downtrend. If support at 1,935 is shattered, the precious metal could plunge to the primary support range between 1,905 and 1,910.
XAU/USD 15-minutes chart
The 4-hour chart illustrates the formation of a falling triangle pattern. A breakout above this, the triangle would invalidate the above described bearish scenario. Besides, the price is still trading above the 50 Simple Moving Average. The moving average has functioned as not only worked support in the past but also an inflection point leading to more upside movement in the past. The triangle breakout targets $2,000 per ounce in the near term. Further upside movement could extend as far as 2,100 (new yearly highs).