- Gold futures market suffered for another week as the US dollar gained.
- XAU/USD might revisit $1,800 if the short term support at $1,820 fails to hold in the coming week.
Gold experienced intense selling pressure in the concluded trading week. The precious metal was not able to pick up momentum following the consistent growth of the US dollar. Attempts to recover failed multiple times for the dollar-dominated asset. Meanwhile, the strongest currency in the world posted gains for the second week in a row.
The 4-hour chart also shows XAU/USD upside was limited by the 200 Simple Moving Average around $1,860. As selling activities surged, gold explored price levels toward $1,820. However, it closed the week at $1,825 amid a build-up of bearish pressure.
If technical levels remain the same on Monday, XAU/USD is likely to break under short term support at $1,820. The pessimistic outlook seems to have been validated by the Relative Strength Index. Moreover, sliding into the oversold region may continue to dampen recovery attempts and perhaps pave the way for losses eyeing $1,800.
XAU/USD 4-hour chart
It is worth taking note of the possibility for recovery if gold holds above $1,820. The reversal that comes into the picture could speed up price action toward $1,860.
Gold futures market will benefit significantly if the US dollar loses some of the gains accrued over the last two weeks. The expected Biden-stimulus for the United States citizens could also push inflation high, increasing demand for the precious metal.
Credit: FX Street