Forex

Gold technical evaluation: XAU USD rally continues as losses persist

  • Uncertainty about Trump's COVID disease led to a brief gold rally to levels above 1,900.
  • The declines are likely to resume in the new week, as the back-track RSI shows.

Gold rallied significantly after news that US President Donald Trump tested positive for COVID-19. Uncertainty has led to stocks in the US and Asia, with some even wiping out gains in the recent past. The precious metal traded slightly above 1,900, allowing investors to hedge against the stock market.

XAU / USD closed at 1,897 on Friday after falling slightly above 1,900. The asset is expected to continue its retreat on Monday, especially if the Relative Strength Index is traced back after a break on the centerline.

XAU / USD daily chart

On the other hand, the Moving Average Convergence Divergence (MACD) highlights the possibility that consolidation has priority. However, if losses persist, the MACD can confirm the downtrend with a bearish divergence. The formation of a descending triangle shows the possibility of collapsing to 1,800.

It's worth noting that when XAU / USD bounces off the triangle support, the bearish fall to 1,800 will be invalidated. Gains above the triangle resistance could pave the way for action above the 50-day simple moving average (SMA). Gold Bullish Case at 2,000 is within reach but awaits confirmation as long as the price is above 50 SMA.

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