Gold Price Analysis: XAU/USD fails at $1720, Next target on the downside aligns at $1700

Gold came under strong bearish pressure in the early American session and touched its lowest level in more than two weeks at $1,705.80 after starting the new week in a calm manner and moving sideways around $1,730. As FXStreet’s Eren Sengezer notes, sellers look to remain in control of yellow metal unless it manages to reclaim $1,720. 

See – Gold Price Analysis: XAU/USD to remain under pressure amid rising US real yields and a strengthening USD – Credit Suisse

Key quotes

“In the absence of significant macroeconomic data releases and fundamental drivers, a technical selloff seems to have got triggered after XAU/USD broke below the key $1,720 handle. Additionally, the rebound witnessed in the US Treasury bond yields is providing a boost to the greenback and further weighing on the pair.”

“The Relative Strength Index (RSI) indicator turned south and dropped to 40, confirming the bearish shift in the near-term outlook. The next support is located at $1,700 (psychological level, March 12 low) and a daily close below that level could open the door for additional losses toward $1,680 (the ending point of the Feb. 2-Mar. 8 drop).”

“$1,720 (former support, Fibonacci 23.6% retracement of the Feb. 2-Mar. 8 drop) now aligns as the first hurdle. XAU/USD could look to confirm that level as resistance before sliding to the $1,700 area. If it manages to reclaim that level, next resistance is seen $1,725 (20-day SMA) ahead of $1,745 (Fibonacci 38.2% retracement).”