- Risk appetite sparked new gold sales on Monday.
- The sustained sale of USD helped limit the decline in the commodity.
- The setup favors bearish traders, although it warrants some caution.
The oro It was unable to capitalize on the intraday bounce from the previous session and witnessed some new selling on the first day of a new trading week, although it lacked follow-up. The commodity remained within the trading range on Friday and was last seen hovering around the $ 1,823 region.
The prevailing risk appetite was seen as a key factor undermining the XAU / USD as a safe haven. The negative factor, to some extent, was offset by a weaker tone around the US dollar, which extended some support to dollar-denominated commodities and helped limit deeper losses.
Given the recent failure near the very important 200-day SMA, the short-term bias remains tilted in favor of bearish traders. With that said, some resilience before $ 1,800 warrants caution from aggressive bearish traders and before positioning for any further depreciation moves.
Meanwhile, technical indicators on the 4-hour / day charts remain in bearish territory and support prospects for an extension of the recent slide. However, traders could still expect sustained weakness below the $ 1,810 area to confirm the bearish outlook.
A subsequent decline below $ 1,800 should pave the way for a decline towards monthly lows, around the $ 1,785 region. XAU / USD could eventually drop to test $ 1,764, levels tested in November 2020.
On the other hand, any significant recovery attempt could be seen as a selling opportunity and remain limited near the $ 1,842-44 resistance zone. This is followed by resistance near the 1.85-55 region (200 DMA), which if removed could negate the negative bias and trigger a short covering rally.
Momentum could push the yellow metal into the heavy supply zone of $ 1,875-76, above which the bulls could point back to regain the $ 1,900 level for the first time since January 8.
Daily chart
Technical levels
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