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Gold Price Nosedives, Recovery Could Be Limited

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Aayush Jindal

Key Highlights

  • Gold price declined heavily below the $1,900 support.
  • It could start a recovery if it clears the $1,840 resistance on the 4-hour chart.
  • Crude oil prices corrected lower from the $95.00 resistance.
  • The US ISM Services PMI could decline from 54.5 to 53.6 in Sep 2023.

Gold Price Technical Analysis

Gold price started a major decline from well above $1,920 against the US Dollar. The price declined heavily below the $1,900 support zone.

The 4-hour chart of XAU/USD indicates that the price settled above the $1,865 level, the 200 Simple Moving Average (green, 4 hours), and the 100 Simple Moving Average (red, 4 hours).

The decline was even extended below the $1,840 level. A low was formed near $1,815 and the price is now consolidating losses. On the upside, the price is facing resistance near the $1,832 and $1,835 levels.

The next major resistance is near the $1,840 level, above which Gold could revisit the key $1,850 resistance zone. Any more gains might call for a move toward $1,880.

On the downside, the price might find support near the $1,815 level. The next key support is near $1,800. If the bulls fail to protect the $1,800 support, there is a risk of a major decline. In the stated case, the price could decline toward the $1,750 level.

Looking at crude oil prices, there was a sustained upward move toward the $95.00 level before the bears appeared and initiated a downside correction.

Economic Releases to Watch Today

  • Germany’s Services PMI for Sep 2023 - Forecast 49.8, versus 49.8 previous.
  • Euro Zone Services PMI for Sep 2023 – Forecast 48.4, versus 48.4 previous.
  • UK Services PMI for Sep 2023 – Forecast 47.2, versus 47.2 previous.
  • US Services PMI for Sep 2023 – Forecast 50.2, versus 50.2 previous.
  • US ISM Services PMI for Sep 2023 – Forecast 53.6, versus 54.5 previous.
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