Gold price slipped into bear’s radar after breaking a two-week-old support line on Friday, now resistance around $1,940. Not only the support line break but the looming bear cross on the Moving Average Convergence and Divergence (MACD) indicator and a pullback in the Relative Strength (RSI) line, placed at 14, also teases the XAU/USD sellers.
Gold price: Daily chartnd: Further downside expected
Additionally favoring the Gold sellers is the “Gravestone Doji” bearish candlestick on the weekly formation, as well as overbought RSI (14) on the same timeframe.
Gold price: Weekly chart
Trend: Pullback expected
That said, the $1,900 threshold and the January 18 swing low surrounding $1,896 restrict short-term Gold downside. Following that, the 21-Daily Moving Average (DMA), near $1,892 by the press time, could act as the last defense of the metal buyers.
On the flip side, the immediate support-turned-resistance line near $1,940 holds the key to the Gold buyer’s re-entry.
Following that, the multi-month high marked in the last week around $1,950 and March 2022 peak close to $1,966 will precede an upward-sloping resistance line from the mid-December 2022, surrounding $1,972 at the latest, to challenge the Gold bulls.
It’s worth noting that the XAU/USD run-up beyond the $1,972 hurdle won’t hesitate to challenge the $2,000 psychological magnet.
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