Gold accelerates lower as growing optimism continues to boost risk sentiment
Spot gold plummeted to new multi-month low on Friday, as hopes for a virus vaccine and rebound in economic recovery, lifted riskier assets and further reduced demand for safe-haven metal.
Gold is on track for the third consecutive weekly close in red, which also marks the biggest weekly drop since early March and set to register fourth straight monthly drop after larger bulls stalled at key $2000 resistance zone.
Bears accelerated through important $1800 support (psychological / 200DMA) after pausing above this support in past two sessions, signaling extension of pullback from new record high at $2074 (7 Aug).
Close below 200DMA would generate strong bearish signal for test of immediate target at $1763 (50% retracement of $1451/$2074 rally) and rising 55WMA ($1726) in extension).
Near term outlook remains negative in expectations that improved risk sentiment is going to persist, but longer-term view also doesn’t show any optimistic signs on prospects that ultra-low interest rates, which reduce the opportunity cost of holding gold, will remain until at least 2023.
Res: 1800; 1818; 1836; 1842
Sup: 1763; 1726; 1700; 1689