- Sustained USD selling, COVID-19 jitters helped gold regain positive traction on Friday.
- The recent break through the double bottom line resistance favors bullish traders.
- A move past $ 1,800, en route to $ 1,815-16 resistance, seems like a clear possibility.
The oro managed to regain positive traction on the last trading day of the week and reversed a portion of the previous day’s rejection drop from $ 1,800. The commodity maintained its offered tone during the middle of the European session and was last seen hovering around the $ 1,790 region, an increase of 0.40% on the day.
The surge in new sales around the US dollar was seen as one of the key factors that continued to provide some support to dollar-denominated raw materials. Apart from this, concerns about the increase in COVID-19 cases in some countries further benefited the XAU / USD safe haven and they continued to act supportive.
On the technical outlook, last week’s strong move past the $ 1,760-65 resistance zone validated a bullish double-bottom breakout and supports the prospects for additional short-term gains. The constructive structure is reinforced by bullish technical indicators, which are still far from being in overbought territory.
Therefore, a subsequent force above $ 1,800, towards the resistance of $ 1,815-16, remains a clear possibility. The latter coincides with the 50% Fibonacci level of the fall of $ 1,959 – $ 1,676, which if cleared will set the stage for an extension of the recent appreciation movement observed since the beginning of this month.
On the other hand, the breaking point of the double bottom neck resistance, around the $ 1,765-60 region now appears to act as an immediate strong support. This is followed by the 23.6% Fibonacci level, around $ 1,745-44 and the $ 1,730 level. Sustained weakness below will negate the positive outlook and lead to some technical selling.
The XAU / USD could become vulnerable and accelerate the slide to challenge the $ 1,700 level. Some follow-up selling would expose double-bottom support, around the $ 1,677-76 region, or multi-month lows touched in March.