In our previously published analysis on 2nd Aug, we anticipated that gold has found support on a temporary note at 1810 but the sideways extended consolidated structure is denoting that 61.8% fibb retracement level and 1825 price actions are going to act as a strong resistance and prevent the commodity from any further gains. In addition to this we emphasized on the bearish side which could extend its losses towards its previous strong support zone 1783. Gold struggled to capitalize on the move or find acceptance above the $1,800 mark and dropped to near two-week lows, closer to the $1,780 region during the early North American session. The US dollar built on its recent bounce from the post-NFP swing lows and climbed to one-week tops. This, in turn, was seen as a key factor that acted as a headwind for dollar-denominated commodities and prompted fresh selling on Wednesday. This marked the third consecutive day of a negative move for the precious metal.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

On the flip side, a sustained move back above the $1,800 mark might trigger a short-covering bounce and lift gold towards the $1,821-22 supply zone. Any subsequent move up might continue to confront stiff resistance near the $1,832-34 region, which if cleared decisively will negate any near-term negative bias. The XAU/USD might then accelerate the momentum towards the $1,853 intermediate resistance en-route the $1.868-70 region. From a technical perspective, the overnight sharp pullback reaffirmed a strong barrier near the $1,832-34 region and constitutes the formation of a bearish multi-top chart pattern. A subsequent fall and acceptance below the $1,800 mark adds credence to the bearish bias and supports prospects for a further near-term depreciating move. Hence, some follow-through weakness towards the next relevant support, around the $1,778-76 region, remains a distinct possibility.

XAUUSD

Sep 08 2021