Gold Price Forecast: XAU/USD breaks above $1790 to challenge the $1800 level

Gold extended its previous week’s bullish momentum into Monday, rallying further to reach the highest levels since August 6 at $1789. On Tuesday, US Retail Sales hold the key for the next direction in XAU/USD, FXStreet’s Dhwani Mehta briefs.

See – Gold Price Forecast: XAU/USD to face tough resistance at $1800 – OCBC

US Retail Sales to confirm XAU/USD’s bullish reversal?

“US Retail Sales are likely to drop by 0.2% in July vs. 0.6% booked in June while the core figures are seen easing to 0.1% in the reported month. A bigger-than-expected fall could add to the sour market mood, bolstering the greenback’s safe-haven appeal at gold’s expense. However, downbeat data could ease Fed’s tapering expectations, which could help limit gold’s pullback from weekly tops.”

“Gold is facing stiff resistance at the 21-Daily Moving Average (DMA) at $1790, which aligns near the previous day’s high. A sustained break above the latter is needed to confirm the bullish reversal. Then a test of the 50-DMA at $1800 could be inevitable. Further up, the mildly bullish 100-DMA at $1806 could impede the advance towards the 200-DMA at $1813.”

“Should the pullback pick up pace, a drop towards Monday’s low of $1771 could be in the offing. The next relevant support is seen at the $1750 psychological level.”