Gold Reaches Oversold Region as It Targets the Low of Level 1489.93

Estimated Reading Time: 3 minutes

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Azeez Mustapha

Updated: 13 October 2022

Key Resistance Levels: $1,900, $1,950, $2000
Key Support Levels: $1,750, $1, 700, $1,650

Gold (XAUUSD) Long-term Trend: Bearish
Gold has continued to decline as it targets the low of level 1489.93. On August 12, buyers attempted to keep the price above the moving average lines but were repelled. The price broke below the moving average lines and resumed a lower high and lower lows price pattern. Meanwhile, on July 19 downtrend; a retraced candle body tested the 50 % Fibonacci retracement level. The retracement suggests that Gold will fall to level 2.0 Fibonacci extension or $1,489.93.

Gold reaches oversold region as it targets the low of level 1489.93 — XAUUSD – Daily Chart

Daily Chart Indicators Reading:
XAUUSD is at level 33 of the Relative Strength Index for period 14. The Gold is in the bearish trend zone as it reaches the oversold region. It indicates that selling pressure has reached bearish exhaustion. The price bars are below the moving average lines which indicates further decline. The 21-day line SMA and the 50 –day line SMA are sloping downward indicating a downtrend.

Gold (XAUUSD) Medium-term bias: Bearish
On a weekly chart, Gold is in a downtrend and has reached bearish exhaustion. Gold price is making a series of lower highs and lower lows. On July 18 downtrend; a retraced candle body tested the 50 % Fibonacci retracement level. The retracement suggests that Gold will fall to level 2.0 Fibonacci extension or $1,482.03.

Weekly Chart Indicators Reading
Gold is below the 20% range of the daily stochastic. It has reached the oversold region. The selling pressure is reaching bearish exhaustion. The price bars are below the 21-day SMA and the 50-day SMA indicating a further downward move.

General Outlook for Gold (XAUUSD)
Gold (XAUUSD) has reached the oversold region as it targets the low of level 1489.93. The downtrend is likely to subside as buyers emerge in the oversold region of the market.They will be attracted at lower levels of price.

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