Gold Price Forecast: XAU/USD is looking to find its feet, but bullish potential is limited

Gold price is finding its feet after Tuesday’s drop, although $1790 remains a tough nut to crack for the bulls. US Markit PMIs are awaited for fresh cues, FXStreet’s Dhwani Mehta briefs.

See – Gold Price Forecast: XAU/USD to turn bearish once below uptrend at $1729 – Commerzbank

XAU/USD’s bullish potential appears limited despite dovish Powell

“The US dollar’s rebound appears to be capping the upside attempts in gold price while the recent weakness in the Treasury yields and a cautious risk tone underpins.” 

“Gold benefits from Fed Chair Powell’s weaker rhetoric on its monetary policy and rising covid case in the Asian regions. Looking ahead, the Eurozone and the US preliminary Manufacturing and Services PMI reports will be closely eyed for fresh hints on the pace of the global economic recovery. Meanwhile, the US stimulus updates and the dynamics in the yields and the dollar will continue to remain the main driver of gold prices.”

“Gold is on the verge of yielding a symmetrical triangle breakout if it breaks above the falling trendline resistance at $1785. The next upside target awaits at $1797, the dashed horizontal trendline resistance. Further up, the $1800 round number will threaten the bulls. If the bulls succeed in recapturing the latter, then a test of the bearish 50-Simple Moving Average (SMA) at $1818 could be inevitable.”

“A breach of the 21-SMA at $1779 would expose the rising trendline support at $1776. A downside breakout from the triangle could open floors towards the previous week’s low of $1766. The last line in the sand for gold buyers is seen at the previous week’s low of $1761.”