- The prevalent upbeat market mood exerted some pressure on the safe-haven commodity.
- A sustained break below $1790 confluence support needed to confirm a bearish breakdown.
- Move beyond the $1720-22 supply zone might prompt some near-term short-covering move.
Gold came under some fresh selling pressure on the last day of the week and eroded a part of the previous day’s goodish intraday positive move.
The downtick marked the third day of a negative move in the previous four and was sponsored by the upbeat market mood. Despite the slide, the commodity has still managed to hold above multi-week lows, around the $1690-89 region set on Wednesday. The mentioned level marks a confluence support comprising of 50-day SMA and 23.6% Fibonacci level of the $1451-$1765 positive move.
A convincing breakthrough might be seen as a fresh trigger for bearish traders and set the stage for further weakness. The commodity might then accelerate the fall to the $1675 intermediate support en-route another confluence support near the $1750-48 region. The latter comprises of 100-day SMA and 38.2%, which should act as a strong base and help limit andy further losses.
Meanwhile, technical indicators on hourly charts have been gaining negative traction and just started drifting into the bearish territory on the daily chart. The set-up supports prospects for an eventual bearish breakdown and an extension of the recent pullback from multi-year tops.
On the flip side, immediate resistance is pegged near the $1715 horizontal level and is closely followed by the overnight swing high, around the $1722 region. A sustained strength beyond the mentioned support-turned-resistance might negate the bearish outlook and prompt some short-covering move back towards monthly tops, around the $1744-45 supply zone.
Gold daily chart
Technical levels to watch