Gold price forecast:
Gold price eye recovery after crater to support trend line
Gold suffered significant declines in the past two weeks, with the precious metal falling more than 7% amid rising US Treasury yields. The losses saw XAU / USD explode at various levels of technical support until the lower limit of the metal’s descending channel helped to contain the falls. ONE perfect image coming out of the trend line saw gold recover slightly and further consolidation of the lower extent may occur, which could cause the price to rise to the overload resistance in the coming days.
Gold (XAU / USD) Price chart: 4 hour period (August 2020 – March 2021)
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If gold rises further, initial resistance may reside throughout the November low, around $ 1,765, with a potential barrier shortly thereafter around $ 1,800. This setback would cause gold to skyrocket to the midpoint of the descending channel, which could then open the door to bearish strategies once again. In the meantime, the risk-reward ratio of downward exposure seems less than ideal.
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That said, the fundamental landscape remains largely unchanged and if US Treasury yields continue to rise in the coming weeks, there may be more weakness in the gold reserve. Beyond the fundamental side of the argument, gold has consistently recorded series of highs and lows since August. With the latest leg take point at support around $ 1,675 and the cross formation of deathin early January, the long-term technical perspective remains low in my opinion.
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Gold showed little sign that the biggest bearish trend since August will end suddenly, so there is little to suggest a bigger reversal to the 200-day moving average or the top. andWL in the descending channel is imminent. While the gold awaits its next move, follow @PeterHanksFX on Twitter for updates and reviews.
– Written by Peter Hanks, Strategist for DailyFX.com
Get in touch and follow Peter on Twitter @PeterHanksFX