Gold Price Analysis: XAU/USD faces downside pressure as recovery finds resistance at $1885
- Recovery losses momentum even as the US dollar keeps pulling back.
- XAU/USD flat for the day after a wild ride.
Gold prices made sharp fluctuations on Monday to end hovering around $1880, at the same level it closed on Friday. The recovery from the slide to $1855 found resistance at $1885.
The yellow metal continues to trade under $1885, finding support above $1870, consolidating even as the US dollar continues to trim gains across the board. Also, equity prices are off lows. The improvement in risk sentiment is not helping gold prices.
The DXY peaked above 91.00 and is now approaching 90.00 again. The rally from multi-year lows lost momentum after equity price across the globe bottomed. Fears about a new strain in coronavirus weighed on market sentiment. The agreement in the US for another round of fiscal stimulus contributed to limit losses.
From a technical perspective, XAU/USD is moving without a clear bias. Earlier on Monday, gold was rejected from above $1900. The bias still points to the upside, but for the outlook to improve, it needs to rise back above $1890. A consolidation above $1900 would suggest more gains ahead. On the flip side, a decline under $1870 would increase the bearish pressure, exposing the recent low at $1855.
Technical levels