Gold price struggled to build on the previous week's impressive gains. XAUUSD needs to clear $1,780 to stretch higher.

The XAUUSD is extending its losses to three consecutive days, turning negative in the week, losing 0.85%. After climbing to a fresh three-month high at $1786.53, the non-yielding metal is retracing, set to finish the week around the $1750 area. Even though it’s an important milestone, XAUUSD could not capitalize on US Dollar (USD) weakness. However, the Relative Strength Index (RSI) slope is turning south, suggesting that consolidation in the mid $1700-$1800 is likely, as buyers regain momentum, to challenge the $1800 psychological level.

XAUUSD’s key resistance levels lie at $1786, followed by $1800, and the 200-day Exponential Moving Average (EMA) at $1802. On the other hand, XAUUSD support levels, the August 22 swing low at $1727.90, followed by the $1700 figure.

The Relative Strength Index (RSI) indicator on the daily chart retreated modestly after having climbed above 70 earlier in the week, suggesting that the latest decline is a technical correction rather than the beginning of a bearish trend.

On the upside, $1,780 (Fibonacci 38.2% retracement of the March-November downtrend) aligns as initial resistance. With a daily close above that level, XAUUSD is likely to face strong resistance at $1,800 (200-day SMA) before targeting $1,830 (Fibonacci 50% retracement).

Interim support seems to have formed at $1,750. In case XAUUSD falls below that level and starts using that level as resistance, it could extend its downward correction toward $1,720 (100-day SMA, Fibonacci 23.6% retracement) and $1,700 (psychological level, 20-day SMA).

Gold Will Struggle to Stretch Even Higher

Nov 20 2022