Gold Price Analysis: XAU/USD snapped 9-week winning streak, closed below $1,950
|- Gold erased more than 4% last week and closed below $1,950.
- Correction could extend to $1,850 area if bearish pressure remains intact.
- $2,000 psychological resistance will be a key level to watch.
After closing the previous nine weeks in the positive territory, the troy ounce of precious metal finally staged a deep correction and lost 4.45%, or nearly $90, last week. Profit-taking and improving market sentiment throughout the week made it difficult for gold to find demand.
Gold technical outlook
Following the sharp drop witnessed during the first half of the week, XAU/USD rose modestly on Thursday but failed to close above the 20-day SMA on Friday. On the downside, $1,930 (Fibonacci 23.6% retracement of March-August uptrend) could be seen as the first support ahead of $1,860/50 area (50-day SMA, Fibonacci 38.2% retracement, August 12 low).
On the flip side, $2,000 (psychological level) aligns as a key resistance. With a daily close above that level, XAU/USD could again target record highs it set at $2,075 earlier in the month. However, unless there is a fundamental driver, such as a drastic shift in market sentiment, the pair could struggle to push higher as longer-term charts continue to show extreme overbought conditions.
Gold chart (daily)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.