- Gold is witnessing a strong sell-off Thursday and falls to nearly three-week lows.
- The technical setup supports the prospects for an eventual break below the $ 1,800 level.
- The attempted recovery move could now face strong resistance near the $ 1,848-50 area.
Gold maintained its selling tone during the first half of the European session on Thursday, trading around the $ 1,815 level, just above the nearly three-week lows set earlier in the day at $ 1,811.
Given this week’s breakout of a short-term uptrend line, subsequent weakness below the $ 1,830 horizontal level supports the prospects for a further short-term bearish move. Therefore, a dip towards the 2021 lows, around the $ 1,800 level reached on January 18, seems like a clear possibility.
Meanwhile, the technical indicators on the daily chart have been gaining negative momentum and are still far from being in oversold territory. Therefore, some continuation selling below the mentioned level could be seen as a new trigger for the bears and pave the way for an extension of the move to the downside.
The next relevant target for the bears is near the $ 1,787-86 area before the XAU / USD finally pulls back to test the November 2020 lows, around the $ 1,765-64 region.
On the other hand, the $ 1,830 level now turns into immediate resistance. Any further rally could be seen as a selling opportunity and remain limited near the breakout point of uptrend line support, around the $ 1,848-50 region. This latest level coincides with the very important 200-day SMA and should now act as a key point for short-term investors.
4 hour chart gold
Gold technical levels
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