Gold Price Forecast: XAU/USD's daily technical setup remains in favor of the bearish traders

In Wednesday’s trading, gold is attempting a minor bounce towards $1750 but is not out of the woods yet. XAU/USD set to test $1700? A daily close below 61.8% Fibonacci level at $1744 flags caution as FXStreet’s Dhwani Mehta notes.

The downside momentum remains well in place            

“The worsening market mood seems to have somewhat revived the demand for the US government bonds, offering temporary relief to gold buyers. However, the further upside appears elusive, as traders will remain cautious ahead of a slew of speeches by the global central banks’ Governors.”

“Gold’s daily chart shows that the price closed below $1744, the 61.8% Fibonacci Retracement level. The next downside target is seen at the August 10 low of $1718, below which the $1700 mark will get tested. If the selling pressure remains unabated, then XAU/USD could fall further towards the August lows at $1688”

“A daily closing above the 61.8% Fib level is critical to unleashing any meaningful recovery towards $1750. Gold bulls will then face stiff resistance at the 50% Fib level of the same advance at $1761. Further up, the confluence of the 38.2% Fib level and the bearish 21-Daily Moving Average (DMA) at $1778 will emerge as the next critical hurdle.”