Gold Price Analysis: Trades with modest losses, downside seems limited

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Gold traded with a mild negative bias through the mid-European session amid the prevalent risk-on mood, albeit has managed to defend the $1722 horizontal support.

Looking at the broader picture, the recent move up has been along a two-month-old upward sloping channel. This coupled with the fact that technical indicators on the daily chart are holding in the bullish territory supports prospects for a further near-term appreciating move.

However, oscillators on hourly charts have been struggling to gain any meaningful traction. The set-up – though seems tilted in favour of bullish traders – warrants some caution before positioning aggressively for any meaningful appreciating move amid stronger USD.

Meanwhile, a convincing break below the mentioned support might prompt some aggressive technical selling and turn the commodity vulnerable to accelerate the fall further towards challenging the trend-channel support, currently near the $1710 region.

On the flip side, Friday's swing high, around the $1740 level, now seems to act as immediate resistance and is followed by the $1755 level. Above the mentioned barrier, the commodity is likely to aim back to retest multi-year tops, around the $1765 region.

The momentum could further get extended and lift the yellow metal further towards the top end of the trend-channel, currently near the $1775-76 region, en-route the $1800 round-figure mark.

Gold 4-hourly chart

https://editorial.fxstreet.com/miscelaneous/XAU_USD%20(6)-637260066895915987.png

Technical levels to watch

XAU/USD

Overview
Today last price1728.12
Today Daily Change-6.10
Today Daily Change %-0.35
Today daily open1734.22

 

Trends
Daily SMA201715.66
Daily SMA501663.44
Daily SMA1001626.42
Daily SMA2001559.69

 

Levels
Previous Daily High1740.43
Previous Daily Low1724.46
Previous Weekly High1765.38
Previous Weekly Low1717.34
Previous Monthly High1747.82
Previous Monthly Low1568.46
Daily Fibonacci 38.2%1734.33
Daily Fibonacci 61.8%1730.56
Daily Pivot Point S11725.64
Daily Pivot Point S21717.07
Daily Pivot Point S31709.67
Daily Pivot Point R11741.61
Daily Pivot Point R21749.01
Daily Pivot Point R31757.58