- Gold’s recovery from $1,850, rejected at $1,880.
- XAU/USD fails to take advantage of the positive market mood.
- Breach of $1,850 support might accelerate the downtrend.
Gold futures are consolidating above $1,870 ahead of the weekly close after having been rejected at $1,880 earlier today. Bullion has managed to bounce up fro key support at $1850 although it remains below $1,900.
The yellow metal has failed to take advantage of the positive market sentiment triggered by drugmaker Pfizer’s announcement that they are seeking emergency-use authorization for their vaccine in the US.
Gold’s uptick has been unable to avoid the second consecutive weekly loss and remains dangerously close to the bottom of the last four months trading range, which might accelerate the near-term downtrend.
XAU/USD remains dangerously close to $1,850 support
On the downside, a break of $1,850 (later-September lows) might attract bears and drive the pair towards $1,795 (mid-July lows) and finally $1,760, the 50% Fibonacci Retracement of the March – July rally.
On the flip side, the pair should break above $1,900 and $1,910 psychological level and the confluence of the 50 and 100-day SMAS to ease bearish momentum and return towards $1,960 (intra-day high) and $1,995 (September 1 high).
Technical levels to watch