Gold Price Forecast: COVID-19 jitters to limit the downside for XAU/USD

A strong pickup in the USD demand dragged gold back closer to weekly lows on Thursday. However, downside potential for XAU/USD seems limited amid COVID-19 woes, according to FXStreet’s Haresh Menghani.

See – Gold Price Forecast: XAU/USD rally higher to struggle at the $1806/12 zone – Commerzbank

Some caution for bearish traders

“Persistent COVID-19 jitters held investors from placing any aggressive bearish bets, warranting some caution before confirming that the XAU/USD has topped out in the near term.”

“Traders now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index and the usual Initial Weekly Jobless Claims. The data might influence the USD and provide some impetus to the commodity.”

“Any subsequent fall below the $1,770 level (23.6% Fibo. level) might attract some buying near the 200-hour SMA, currently around the $1,760 area. This is closely followed by the 38.2% Fibo. level, near the $1,754 region, which should now act as a key pivotal point for short-term traders.”

“The $1,795 zone now seems to have emerged as immediate strong resistance. Some follow-through buying beyond the $1,800 mark will be seen as a fresh trigger for bullish traders and set the stage for additional gains. The XAU/USD might then surpass an intermediate hurdle near the $1,812-13 region, or the very important 200-day SMA, and aim to challenge the double-top resistance, around the $1,832-34 zone.”