XAU/USD could make a downward correction in the short term

Gold has climbed above $1,900 for the first time in seven months ahead of the weekend. But the technical outlook suggests XAU/USD eyes correction before extending rally, FXStreet’s Eren Sengezer reports.

$1,880 aligns as initial support

“XAU/USD’s near-term technical outlook points to overbought conditions with the pair trading slightly above the ascending regression channel coming from early November and the daily Relative Strength Index (RSI) holding above 70. Hence, Gold could stage a technical correction before extending its uptrend.”

“On the downside, $1,880 aligns as initial support ahead of $1,860. In case the latter support fails, XAU/USD could continue to fall toward $1,830.”

“In case Gold price stabilizes above $1,900 and confirms that level as support, it could target $1,920, $1,940 and $1,960, all static levels from April 2022.”