Gold Price Remains Under Pressure But a Move Above $2000 Still Likely

Gold price chart

Gold price on the XAUUSD chart continues to face an uphill battle as the US Dollar gained traction overnight. Speculators are starting to take profits on US Dollar short positions. The Jackson Hole symposium comes up this week, and this gathering of economists, banks and central bankers is expected to dictate the tone for the US Dollar this week.  

The XAUUSD pair has gained more than $500 from the lows of March 2020. The price burst through $2000 was a steep move that lacked follow-through action, ensuring that gold prices have stayed below this critical price level into the 3rd week. The unwinding of USD shorts may be responsible for the depreciation in gold. Goldman Sachs had earlier this month, upped price projections on the yellow metal and these projections have remained intact. 

Gold is currently trading at 1927.50, down 0.06% on the day.

Technical Outlook for Gold Price

Gold price action on the XAUUSD daily chart shows that price has started to conglomerate around the 1918.68 support line. Gold price continues to show lower highs, which seems to suggest that the uptrend move beyond 2,000 may have stalled. Re-establishment of the short-term uptrend requires a closing penetration above the 2075.14 mark. However, this move has to take out the resistance levels at 1932.32, 1966.16, 2008.04 along the way.

On the flip side, we can see that the daily candles of last week and yesterday continue to display lower highs, which could pressurize the 1918.68 support. A breakdown of this support level opens the door towards the 1898.48 support (61.8% Fibonacci retracement level of the 14 July to 7 August swing move). The ascending support line which connects the lows from 5 June to date intersects this Fibonacci level. If this level gives way, we could see a selloff towards 1869.39, with 1821.55 and 1788.90 lining up as potential downside targets.

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Gold Price Chart (daily)

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