Gold looks to extend the downside, eyes on $1850

Gold (XAU/USD) once again witnessed a good two-way price action on Wednesday but remained trapped in the $20 range, well below $1900. Bears are set to dominate along with coronavirus fears, FXStreet’s Dhwani Mehta reports.

More:

• Gold is neutral within the 1850-1973.80 limits – Commerzbank
• Gold to face further downside pressure in the immediate term – HSBC

Key quotes

“Gold remains exposed to downside risks, as the risk-aversion on the global markets could deepen and revive the dollar’s recovery momentum, as investors take note of the new shutdowns worldwide and its likely impact on the global economic recovery. Also, the vaccine optimism seemingly faded, as its dissemination is seen unlikely before Spring 2021. The US docket highlights the Philly Fed Manufacturing Index, although the covid data will likely hog the limelight.”

“A test of the measured target $1822 cannot be ruled out in the coming days should the bulls fail to defend the crucial $1850/49 support area. That level is the confluence of the September month low and November 9 low.”

“Recapturing the $1873 barrier, the intersection of the bearish 21-HMA and the pattern support now resistance, is critical for the recovery to gain traction. Further up, strong resistance awaits at $1884, which is the convergence of the 100 and 200-HMAs.”