Gold price lacks follow-through recovery momentum. Sell the XAU/USD bounce above $1,700? FXStreet’s Dhwani Mehta analyzes XAU/USD’s technical picture.

Short-term technical outlook for gold remains bearish

“Bears need to find footing once again below $1,700 to resume the downside momentum. The next cushion is seen at the rising trendline support at $1,690. Should the decline accelerate below the latter, a test of the 2021 low of $1,677 will be on the table, below a break of the yearly lows.”

“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 bearish potential in the metal.”

“Bulls will meet initial resistance at Friday’s high of $1,718, above which the $1,720 round number could come into play. The August 31 high of $1,727 could be a tough nut to crack for XAU buyers.”