- Gold is staging a rebound following Monday's slump.
- XAU/USD stays below a cluster of moving averages.
- A daily close below $1,850 could cause the outlook to turn bearish.
After climbing to its highest level since mid-September at $1,965 on Monday, the XAU/USD pair made a sharp U-turn and suffered its largest daily percentage decline since early August. The pair closed at $1,861 and lost 4.58% but started to erase its losses on Tuesday. As of writing, XAU/USD was up 1.2% on the day at $1,884.
Gold technical outlook
Despite Tuesday's rebound, XAU/USD continues to trade below the 20-day, 50-day and 100-day SMAs, which are currently located around $1,900 psychological level. Additionally, the Fibonacci 50% retracement of the June-August uptrend is reinforcing this resistance area. Meanwhile, the Relative Strength Index (RSI) indicator on the daily chart stays below 50, suggesting that the pair is making a technical correction. Only a decisive break above $1,900 could attract more buyers and help XAU/USD shake off the bearish pressure.
On the other hand, the Fibonacci 61.8% retracement of the same trend seems to have formed important support at $1,850. If price makes a daily close below $1,850, it could extend its slide toward $1,815 (former resistance).
Gold daily chart
Additional levels to watch for
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