- XAU / USD accelerates its downtrend to hit five-month lows at $ 1,775.
- Gold suffers amid positive market sentiment.
- The breach of the $ 1,800 support increases the negative momentum of gold.
Gold futures They accelerated the heir downtrend from last week’s highs near $ 1,900, breaking below the 200-day SMA at the 1,800 area to hit their lowest prices in nearly five months at 1,775. Bullion prices are attempting to regain ground lost in the latest US session, although they are still well below the key $ 1,800 support area.
Gold prices suffer from risk appetite
Investor optimism about the promising results of the various COVID-19 vaccines and positive sentiment over Joe Biden confirmed his victory in the US elections have offset concerns about the bleak economic outlook for this and possibly the next quarter as well.
The market appears to be focused on a happier spring and summer, which is driving stocks higher at the expense of safe havens like gold. The XAU / USD is on track to close its worst week in two months, down 4.5% at time of writing, and racking up an 8.5% drop in the past three weeks.
XAU / USD: Breakout of $ 1,800 Will Increase Bearish Momentum
From a technical standpoint, bearish confirmation below the 200-day moving average at $ 1,800 would add to the negative traction. On the way south, the next areas of interest are $ 1,760, the 50% Fibonacci retracement of the March-July rally, and $ 1,700 (June 15 lows).
With technical indicators on the daily chart already at oversold levels, the XAU / USD could bounce before dropping further. On the upside, above the mentioned $ 1,800, the pair should break above the $ 1,815 level (November 25 high) and extend beyond $ 1,850 to ignore the downward pressure and pave the way to the psychological level. $ 1,900 and $ 1,910 and the 100-day SMA.