Gold Price Forecast: XAU/USD to test $1,700 on a close below 50 DMA at $1,744

Gold price is consolidating the recent run of declines near four-week lows below $1,750. Will XAU/USD bulls defend the 50% Fibo support? FXStreet’s Dhwani Mehta analyzes the yellow metal’s technical outlook.

Buyers need acceptance above $1,760 to initiate any meaningful recovery

“Failure to defend $1,744, which is the 50% Fibonacci Retracement (Fibo) level of the recovery from yearly lows of $1,681 to the August 10 high of $1,808, on a daily closing basis will intensify the bearish momentum, with a test of the $1,700 threshold inevitable. Ahead of that, the $1,730 demand area could limit the downside.”

“Buyers need acceptance above $1,760 to initiate any meaningful recovery. That level is the confluence of the 38.2% Fibo level and the previous day’s high. The next upside target is aligned at the bullish 21-Daily Moving Average (DMA) at $1,766, above which the bearish 50 DMA at $1,773 will come into play.”