Gold Price Forecast: XAU/USD set to test $1700? Daily close below 61.8% Fib level flags caution
Gold’s daily chart shows that the price closed below $1744, the 61.8% Fibonacci Retracement level of the recovery from the August lows of $1688 to the September 3 highs of $1834.
The 14-day Relative Strength Index (RSI) has edged slightly higher but remains well below the central line, suggesting the downside momentum remains well in place.
Therefore, any rebound is likely to remain short-lived and could be seen as a good opportunity for the sellers to create fresh entries.
The next downside target is seen at the August 10 low of $1718, below which the $1700 mark will get tested.
If the selling pressure remains unabated, then gold price could fall further towards the August lows.
Alternatively, a daily closing above the 61.8% Fib level is critical to unleashing any meaningful recovery towards $1750.
Gold bulls will then face stiff resistance at the 50% Fib level of the same advance at $1761.
Further up, the confluence of the 38.2% Fib level and the bearish 21-Daily Moving Average (DMA) at $1778 will emerge as the next critical hurdle for gold bulls.
Reference: FXStreet
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