Gold price is in the green for the first time in seven days. Recession fears and 61.8% Fibo support could offer a brief reprieve to gold bulls, FXStreet’s Dhwani Mehta reports.

61.8% Fibo, recession fears could aid XAU/USD’s dead cat bounce

“A mix of recession fears combined with hawkish Fed expectations construes a perfect storm for markets, which could revive the bright metal’s appeal as the traditional safe haven.” 

“For the recovery to gain legs, bulls need to crack $1,744, the 50% Fibonacci Retracement (Fibo) level of the recovery from yearly lows of $1,681 to the August 10 high of $1,808, on a daily closing basis, with eyes back on the $1,750 psychological level.” 

“It is worth noting that the RSI still remains in the negative territory while the 50-Daily Moving Average (DMA) is approaching the 21 DMA from above, warranting caution for bulls. Therefore, the rebound appears short-lived and bears could remain in control in the near-term.”

“A sustained break below the 61.8% Fibo support at $1,729 will open up the downside towards $1,700, below which the yearly lows of $1,681 will be challenged.”

See – Gold Price Forecast: XAU/USD to struggle near-term, recovery to $1,900 expected next year – Commerzbank