Gold Price Forecast: XAU/USD draws a bullish flag pattern, $1800 in the crosshairs

Gold edged lower on Thursday and slipped to three-day lows, albeit lacked any strong follow-through selling. The yellow metal has regained some positive traction on Friday while a bullish flag pattern is in the making for XAU/USD, FXStreet’s Haresh Menghani briefs.

See – Gold Price Forecast: XAU/USD rally higher to struggle at the $1806/12 zone – Commerzbank

Surge above the $1,800 mark to reaffirm the bullish bias

“In the absence of any major market-moving economic releases from the US, the focus now shifts to the Jackson Hole Symposium scheduled for 26 to 28 August. In the meantime, the XAU/USD is more likely to remain confined in a broader trading range held since the beginning of this week.”

“The recent price action constitutes the formation of a downward sloping channel on the 1-hour chart. Against the backdrop of a strong rebound from multi-month lows, the mentioned channel could be categorized as a bullish continuation flag pattern. However, technical indicators on the daily chart are yet to confirm a bullish bias.”

“A subsequent strength beyond the weekly tops, around the $1,795 region, and the $1,800 mark will reaffirm the bullish bias. XAU/USD might then surpass an intermediate hurdle near the $1,812-13 region, or the very important 200-day SMA, and aim to challenge the double-top resistance, around the $1,832-34 zone.”

“The overnight swing low around the $1,775 region now seems to protect the immediate downside ahead of the trend-channel support near the $1,770 area. This is closely followed by 200-hour SMA, around the $1,760 area, which if broken decisively will shift the bias in favour of bearish traders. The next relevant support is pegged near the $1,751 horizontal zone.”