Key Points

• Gold breaks below monthly support at $1850.
• Bears heading for the $1760 support threshold
• Bulls will struggle to reclaim the ascending channel.

Gold Spot is fighting for dear life near the critical $1800 region after tumbling below the strong support at $1849 region. The short-term outlook for the yellow metal abruptly turned bearish yesterday and remains inclined onto the downside, as illustrated by the technical charts below. As a matter of fact, Gold risks further bearish drive below the $1790 close to the 200MA, indicated by the red shaded region.

Gold 4 Hourly Chart

The key 200-day MA level near $1798, the mid-July bottom around $1790 does mounts up some level of refrain to the yellow metal’s downside. The precious metal managed to find decent support near the $1800 round figure, just ahead of a technically significant 200 MA and for now, seems to have stalled its recent downward trajectory. Sustained US dollar selling bias extended some support to the dollar-denominated commodity and prompted some short-covering amid near-term oversold conditions.

Meanwhile, gold buyers are less likely to take entries until prices recovers and successfully close above $1850. On the other hand, the existing oversold RSI condition can for a moment discourage push the bears from pushing further down and rest around any of the supports mentioned above.

On a lower timeframe, Gold edged higher during the early European session in a simple display of market correction rather than a significant bullish move. However, any further weakness past $1790 will not hesitate to strike the $1680 region.