Gold registered losses for the third straight week despite Friday's rebound. XAU/USD looks to extend correction, in the view of FXStreet’s Eren Sengezer.

$1,700 aligns as significant support

“The Relative Strength Index (RSI) indicator turned north and recovered to 40 after testing 30 on Thursday. This technical development suggests that gold could extend its upward correction in the near term.” 

“On the upside, the 20-day and the 50-day SMAs form an important resistance area at $1,750. A daily close above that hurdle could open the door for an extended rebound toward $1,780 (Fibonacci 23.6% retracement of the latest downtrend) and $1,800 (psychological level, 100-day SMA).”

“$1,700 (psychological level, end-point of the latest downtrend) aligns as significant support. In case XAU/USD falls below that level again and confirms it as resistance, it could target $1,680 (July 21 low).”