August 3, 2022
  • August 3, 2022

Gold Price Analysis: XAU / USD Refreshes Session Highs, Bulls Eyeing $ 1,800

By on April 23, 2021 0
  • Sustained USD sales, COVID-19 nervousness helped gold regain positive traction on Friday.
  • The recent breakout through the resistance of the double bottom neckline favors bullish traders.
  • A move beyond the $ 1,800 mark, currently resisting from $ 1,815 to $ 16, appears to be a distinct possibility.

Gold managed to regain positive traction on the last trading day of the week and reversed part of the neighborhood eve’s rejection slide to $ 1,800. The commodity maintained its submissive tone throughout the mid-European session and was last seen hovering around the $ 1,790 region, up 0.40% for the day.

The emergence of new sales around the US dollar was seen as one of the main factors that continued to support the dollar denominated product. Apart from that, concerns about the surge in COVID-19 cases in some countries also benefited safe-haven XAU / USD and remained supportive.

Looking at the technical picture, last week’s strong move beyond the resistance zone of $ 1,760- $ 65 has validated a bullish double-bottom breakout and supports the outlook for further near-term gains. The constructive assembly is reinforced by bullish technical indicators, which are still far from being in overbought territory.

Therefore, further strength beyond the $ 1,800 mark towards the resistance of $ 1,815-16 remains a distinct possibility. The latter coincides with the 50% Fibonacci level of the fall from $ 1,959 to $ 1,676, which, if cleared, will pave the way for a continuation of the recent appreciation movement seen since the start of this month.

On the other hand, the double bottom neckline resistance break point, around the $ 1,765- $ 60 region, now appears to be acting as immediate strong support. Next comes Fibo at 23.6%. level, around the $ 1,745-44 area and the $ 1,730 level. Sustained weakness below will negate the positive outlook and drive technical selling.

XAU / USD could then become vulnerable and accelerate the fall to challenge the round-digit $ 1,700 mark. Some follow-up sales would expose double-bottom support, around the $ 1,677- $ 76 region, or multi-month lows hit in March.

XAU / USD daily chart

Technical levels to watch