Gold Price Forecast XAU/USD rebound fades below $1,750

XAU/USD: Daily chart

Gold (XAU/USD) fades the latest bounce off a four-month low near $1,688 to $1,740, down 1.4% intraday, heading into Monday’s European session. While US dollar consolidation and recovery in the market’s risk appetite seems to have triggered the gold price rebound, the bears remain hopeful amid the Fed’s tapering concerns and covid woes.

Gold extended Friday’s US NFP-led south-run during early Asia before bouncing off the lowest levels since March 31. The corrective pullback takes clues from the market’s optimism for the US infrastructure spending bill’s passage from the Senate as policymakers are up for the final voting on Tuesday.

Technical analysis

Gold confirmed the double top bearish chart pattern on Friday by breaking $1,790 horizontal support. The daily closing below an ascending trend line from March also strengthened the bearish impulse. However, oversold RSI conditions backed the latest corrective pullback.

The same, however, remains less impactful for the gold buyers until the quote rises past the previous support line from March 31, around $1,784. Even so, the horizontal area surrounding $1,790 will test the recovery moves.

In a case where gold buyers keep reins past $1,790, 100-DMA and 50-DMA will challenge the upside bias, respectively around $1,804 and $1,815, before highlighting the one-month-old horizontal resistance near $1,832-34.

On the flip side, the $1,700 threshold could entertain the gold bears ahead of directing them to the recent low surrounding $1,688-87.

Though, a horizontal area comprising the yearly lows near $1,676, touched twice in March, will be a tough nut to crack for the gold sellers.

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