XAU / USD points towards key 1.828 support ahead of Powell

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  • Gold rebound loses steam below $ 1,850, bears take over.
  • The breakout of the bullish channel on the 1 hour chart points to further losses.
  • A breakout of the key support at $ 1,828 is likely before Powell.

Gold (XAU / USD) remains vulnerable to deeper losses, as US Treasury yields and the US dollar continue to celebrate the prospects of a larger than expected fiscal stimulus plan of approximately $ 2 trillion. , which will likely be announced by President-elect Joe Biden on Friday. Before that, Fed Chairman Jerome Powell’s speech will be the key for gold investors.

At the time of writing, gold is trading at $ 1,841, down 0.40% on the day, as the rally met stiff resistance just below the $ 1,850 level.

The downward bias in gold prices remains intact, especially after the price confirmed a breakout of the bull channel on the 1-hour chart following the expected stimulus news from the Biden Administration.

The bearish crossover of the 21-hour moving average and the 50-hour moving average adds credibility to the sell bias. The white metal broke the support of the pattern, now at $ 1,853, and fell to daily lows at $ 1,828.

Since then, the bulls are trying to react, but to no avail, as the RSI points down below the midline while holding well above oversold territory.

Recovery attempts are capped below the support of the pattern, now turned into resistance at $ 1,847. The next relevant hurdle awaits at the bearish 21-hour moving average at $ 1,849. The 50 hourly SMA at $ 1,853 could offer further resistance.

On the other hand, sellers could retest the daily lows, below which the target would be at the Jan 11 low of $ 1,817.

Gold 1 hour chart

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Gold technical levels

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