Gold suffered heavy losses on Friday and closed the week in negative territory. As FXStreet’s Eren Sengezer notes, the near-term technical outlook points to a bearish shift.

$1,720 aligns as the first support

“Following Friday's action, the Relative Strength Index (RSI) indicator on the daily chart dropped below 50, pointing to a bearish tilt in the near-term technical outlook.”

“On the downside, $1,720 (static level) aligns as the first support ahead of $1,700 (psychological level, the end-point of the latest downtrend). A daily close below the latter could open the door for an extended slide toward $1,680 (July 21 low).”

“$1,760 (20-day SMA, 50-day SMA) forms first resistance before $1,780 (Fibonacci 23.6% retracement of the latest downtrend) and $1,800 (psychological level, static level).”