Gold (XAU/USD) witnessed some heavy selling on Tuesday and dived to levels below the $1800 mark. Bears await a break below monthly swing lows, around the $1785 before the next leg down, FXStreet’s Haresh Menghani reports.
Key quotes
“The bearish pressure seems to have abated, at least for the time being, though the near-term bias remains tilted firmly in favour of bearish traders. The USD could gain some follow-through traction if bond yields continue to rally, which, in turn, should act as a fresh bearish catalyst and pave the way for further weakness. Apart from this, the broader market risk sentiment will also play a key role in influencing the commodity.”
“A drop below the $1785 area (monthly lows) will reaffirm the near-term bearish bias and pave the way for a further depreciating move towards extending from November 2020 swing lows support, around the $1764 region. The downward trajectory could further get extended towards the $1739-37 horizontal support.”
“Any meaningful recovery attempt beyond the $1800 mark might now be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the $1808-10 region. That said, some follow-through buying might trigger a short-covering move and push the commodity further towards the overnight swing highs, around the $1825-27 supply zone.”