Gold Price Forecast: XAU/USD points to deeper loss amid a potential bear flag

On Wednesday, gold price is licking its wounds after the previous sell-off. But as XAU/USD carves out a bear flag, deeper losses below $1800 are expected, FXStreet’s Dhwani Mehta reports.

See – Gold Price Forecast: XAU/USD to extend the bounce towards $1916/32 on a move beyond $1835 – SocGen

There is more room to drop for XAU/USD

“Covid concerns could continue to influence the broader market sentiment, impacting the dollar and gold price. Although, the US JOLT jobs opening data could offer some trading incentives.”

“Gold has carved out a bear flag pattern, in light of the recent consolidation that followed Tuesday’s slide. A sustained break below the confluence of the 200-Simple Moving Average (SMA) and rising trendline support at $1795 could confirm the bearish continuation pattern, calling for further downside towards $1760. Ahead of that the mid-August lows around $1775 could test the bullish commitments.”

“Powerful resistance at $1802 will likely keep gold bulls capped, as that level is the intersection of the horizontal 100-SMA and rising trendline resistance. A four-hourly candlestick closing above the latter could reinforce the recovery momentum, opening doors for a test of the next relevant upside barrier at $1814, the 50-SMA.”