Gold Price Recovers Above 1800, But Downside Risks Remain
Gold price has retaken the 1800 price level as it pares most of its losses for the last week of November following the breakdown of the bearish flag on the daily chart of the XAUUSD.
The US Dollar remained under pressure ahead of the testimony by the US Fed Reserve Chairman Jerome Powell, provided via a source-released testimony 18 hours earlier than scheduled to the Committee on Banking, Housing and Urban Affairs in Washington DC. Testimony will border on the CARES Act and how the Fed has worked within this law to fight the economic impact of the US’s coronavirus epidemic.
Gold price is currently trading at 1812.60, well ahead of the 1800 psychological price level.
Technical Levels to Watch
A look at the daily chart of XAUUSD shows the robust recovery in gold price by 2.06% as at the time of writing, as sellers take profit from the degrading of the bearish flag that occurred last week. A trace of the breakdown move with the Fibonacci retracement tool indicates that the 50% and 61.8% retracement levels lie at 1821.93 and 1835.38, respectively. These could be the immediate upside targets before the 1850.29 level (24-28 September lows) comes into the picture. 1869.39 and 1900.76 are other resistance areas of note.
On the other hand, downside targets continue to exist at 1800.34, 1788.90, and 1762.51, which is just below the most recent low seen in Monday’s trading. These areas may become new targets if sellers decide to sell into a rally towards any previously mentioned upside targets.