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· Gold is trying a small recovery in oversold conditions

Gold – Silver

Gold Spot held just a point above strong support at 1685/80 (despite further gains inthe US dollar) where we predicted a low for the day. The bounce hit our targets of1700/01 & 1705/10. We topped exactly here.

Silver Spot we wrote: breaks strong support at 2550/40 to target 2525/15. Furtherlosses look likely eventually to 2475/65...

We hit 2481 but outlook remains negative.

Daily analysis

Gold trying a small recovery in oversold conditions. First resistance at 1705/08 butabove 1710 allows a recovery to 1722/26. Watch for a high for the day. Shorts needstops above 1729.

Holding first resistance at 1705/08 keeps us in a bear trend targeting 1694/90 beforea retest of strong support at 1685/80. A low for the day likely again. A break lowerhowever targets the 100 week moving average at 1650/45.

Silver holding below strong resistance at 2540/50 keeps the outlook negative totarget 2525/15 & 2475/65, eventually as far as 2430/20.

A selling opportunity at 2540/50 with stops above 2575. A break higher meets strongresistance at 2510/20.

· Gold strongly bearish continuation below the double bottom

Gold is strongly bearish. Continuation below double bottom will open the doors to 1656. Watch for a continuation below the double bottom or a rejection from the POC zone.

1700-10 is the POC zone, we could see a move straight from the POC towards a retest of 1687 zone. We should see a move lower towards 1667 and 1656. From there, the move up is expected as a form of retracement. Gold has also formed the double top which cues for a continuation down.

· Gold Price Analysis: XAU/USD downtrend is still far from being over

Gold is fighting around $1,700, benefiting from stimulus funds and shrugging off the increase in yields. According to FXStreet’s Haresh Menghani, the uptick might still be seen as an opportunity for XAU/USD bears.

“The passage of US President Joe Biden's $1.9 trillion pandemic aid package, along with reports of attacks on Saudi Arabian oil production facilities extended some support to the safe-haven XAU/USD.”

“In the absence of any major market-moving economic releases from the US, the broader market risk sentiment will play a key role in driving the XAU/USD. Apart from this, the US bond yields will influence the USD price dynamics and produce some meaningful trading opportunities.”

“Any further recovery towards the $1722-23 region would still be seen as a selling opportunity. This, in turn, should cap the upside near the $1740 heavy supply zone. That said, a sustained move beyond has the potential to push the metal back towards an important $1760-65 strong support breakpoint, now turned resistance.”

“The trend-channel support, around the $1690-88 region, might continue to protect the immediate downside. A sustained breakthrough will be seen as a fresh trigger for bearish trades and turn the commodity vulnerable to accelerate the fall towards the $1670 horizontal support. Some follow-through selling should pave the way for a further near-term depreciating move towards the next major support near the $1620-15 region.”

Reference: FXStreet