Gold price witnesses a brief pullback before resuming the next downtrend. As FXStreet’s Dhwani Mehta notes, XAU/USD downside risks are intact towards $1,677.

Technical outlook for gold remains bearish

“Should the downside accelerate, a test of the 2021 low of $1,677 will be inevitable. The 14-day Relative Strength Index (RSI) still holds just above the oversold region, indicating more pain ahead.”

“The 21-Daily Moving Average (DMA) is set to cut the 50 DMA from above, which if confirmed on a daily closing basis will represent a bear cross. The bearish crossover will add credence to the ongoing losing streak in the metal.”

“Bulls will meet initial resistance at the previous day’s high of $1,711, above which the $1,720 round number could come into play. The July 22 low of $1,728 could challenge bearish commitments on the road to recovery.”