Gold: Downside bias intact
|Gold (XAU/USD) remained under pressure amid US holiday-led light trading and settled Monday around $1929, having formed lower highs for the fourth straight session. Technical set up remains in favor of the bears but US-China escalation could save the day for XAU bulls, FXStreet’s Dhwani Mehta reports.
Key quotes
“Gold is likely to remain less preferred, as the US traders return after a long weekend. However, any escalation on the US-China front could offer temporary respite to the XAU bulls. According to the latest NY Times report, the US is considering a ban on cotton from China’s Xinjiang province.”
“Following the downside consolidation overnight, gold broke the range to the downside, confirming a symmetrical triangle breakdown on the hourly sticks. The move lower exposes the pattern target at $1895. Ahead of that level, the bulls could defend last Friday’s low of $1916.42. A break below which will put a $1900 mark to test.”
“The recovery attempts could meet the robust upside barrier around $1930, the confluence of the bearish 21-hourly Simple Moving Average (HMA), pattern resistance and horizontal 50-HMA. A sustained break above the latter could fuel a rally towards the next hurdle of the downward-sloping 100-HMA at $1940. Acceptance above the horizontal 200-HMA at $1949.29 is critical to recall the buyers.”
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