Gold is currently trading below the peak, exchanging at prices under $1,740. Based on various analysts, the $1,730 level is believed to hold the key for the XAU/USD bulls as the US dollar strengthens modestly.
Notably, the risk-off mood, coupled with softer US bond yields extended some support and it may help limit the losses.
“There isn’t any major market-moving economic data due for release from the US on Monday, leaving the XAU/USD at the mercy of the USD price dynamics. Apart from this, the US bond yields might also influence the commodity. Traders might further take cues from the broader market risk sentiment for some meaningful opportunities around gold.”
Failure to break a previous strong support breakpoint located near the $1,760-65 region seems to have shifted the bias to favor the bearish traders. That said, it is still advisable for the traders to wait for some follow-through selling pressure below the $1,730 price level before they adopt major positions for further depreciating moves.
The next critical support is located near the $1,720 area, below which the gold bears maim to challenge the $1,700 mark. If the downtrend continues and breaks these support levels, XAU/USD may eventually plunge to retest the multi-month lows support near the $1,677-76 region. These lows feature the formation of a bullish double-bottom.
“A sustained strength beyond the $1,760-65 region will be seen as a fresh trigger for bullish traders and set the stage for additional gains. The yellow metal might then accelerate the momentum towards an intermediate resistance near the $,1,782-84 area before eventually aiming to reclaim the $1,800 round-figure mark.”
As the gold market continues to remain uncertain, what will trigger the next price action?