Gold price holds lower ground near $1,707, after refreshing the 1.5-month low, during the early European morning on Thursday. In doing so, the yellow metal appears to struggle between the technical signals and the fundamentals.

That said, the technical analysis hints at a short-term rebound amid RSI divergence while the fundamentals suggest risk-aversion, a firmer US dollar and the pessimism about China weighing on the XAU/USD prices.

Gold price bounces off the support line of the weekly bearish channel amid an oversold RSI (14) on the hourly. The rebound also takes clues from the bullish divergence as the prices make lower low but the RSI prints higher low.

Even so, the recovery remains elusive until the quote remains below the $1,715 resistance confluence including the stated channel’s upper line and the support-turned-resistance from August 22.

Following that, a run-up towards the 200-HMA level near $1,738 can’t be ruled out.

Meanwhile, the stated channel’s support line, at the $1,700 round figure restricts the quote’s immediate downside, a break of which could quickly direct the XAU/USD bears towards the yearly low surrounding $1,680.

The immediate resistance is seen at the previous day’s low of $1,710, above which, $1,720 – the previous intermittent lows will be probed. Buyers will seek control above the latter, adding strength to the recovery towards the rising trendline support-turned-resistance at $1,745

Sellers need a daily close below the $1,700 threshold to bring the 2022 low of $1,681 back in the spotlight. However, the $1,690 support area could impede the bearish momentum.

A Rebound Expected on Gold From Above $1680

Sep 01 2022

Stop Loss -1.05%

Holding time 14d2hr

1697.67

Entry price

1679.84

Stop loss price