XAU/USD Outlook: Limited Correction To Precede Bearish Continuation

Technical analysis of Forex market

Spot gold rose from new nine-month low ($1676) on Tuesday, as dollar bulls are pausing and technical studies on daily chart are oversold, providing temporary support to the metal.

Overall picture remains negative for gold, as global growth recovery and optimism over vaccine rollout fuels risk sentiment and reduces safe-haven demand, suggesting limited recovery before larger bears resume.

Broken pivotal support at $1725 (Fibo 38.2% of $1160/$2074, reinforced by falling 10DMA) reverted to solid resistance which should ideally cap upticks and keep intact key barriers at $1760/64 (base of thick weekly cloud/Nov 30 low/falling 20DMA).

Higher base at $1670 (lows of June 5/May 1 2020) mark initial target ahead of $1617 (50% retracement of $1160/$2074, 2018/2020 advance).

Only firm break of $1760/64 pivots would sideline bears for stronger correction.

Res: 1714, 1725, 1750, 1760
Sup: 1676, 1670, 1648, 1617