- Gold struggled to capitalize on the previous day's bounce from two-week lows.
- A modest USD strength was seen as a key factor that capped gains for the metal.
- A softer risk tone, dovish Fed held bears from placing bets and help limit losses.
- The technical set-up supports prospects for an extension of the recent pullback.
Gold witnessed a subdued/rangebound price action on Friday and remained confined in a range, around the $1,770 region through the early part of the European session.
Gold struggled to capitalize on the previous day's bounce from two-week lows. A modest USD strength was seen as a key factor that capped gains for the metal. A softer risk tone, dovish Fed held bears from placing bets and help limit losses. The technical set-up supports prospects for an extension of the recent pullback.
From a technical perspective, the recent failure near the $1,800 mark and the overnight slide below the $1,765-60 support zone might have shifted the bias in favour of bearish traders. Hence, any intraday positive move is more likely to be seen as a selling opportunity and runs the risk of fizzling out rather quickly. The XAU/USD now seems vulnerable to slide back to test the $1,700 mark in the near term.
