Gold Price Forecast: XAU/USD to face crucial resistance level at $1770

Starting out a big week on Monday, gold price treads water above $1750. However, XAU/USD’s upside potential appears limited, according to FXStreet’s Dhwani Mehta.

See – Gold Price Forecast: XAU/USD to struggle in the face of rising yields and stronger USD – Credit Suisse

XAU/USD struggling to extend its recovery momentum

“Gold will likely maintain its range trade while above $1750, as a scarce US docket and holiday-thinned trading could leave the metal at the mercy of the dollar dynamics and risk trends. China Evergrande updates will be closely followed amid a covid resurgence in Asia-Pacific regions, as markets shrug off positive news on new drugs to fight the coronavirus. Note that the US Factory orders will drop in the NA session.”

“The further upside is likely to be capped by the bearish 21-Daily Moving Average (DMA) at $1770. If the bulls manage to find acceptance above the latter, then a fresh advance towards 50-DMA at $1784 would be in the offing. The next relevant upside target is aligned at $1800.”

“Rejection at the $1770 21-DMA hurdle could trigger a sharp move lower towards the $1750 threshold, below which the September 27 highs of $1745 could be put to test. Floors will then open up towards the rising trendline support of $1725 on the acceleration of the downside.”