Gold price is looking to extend its downside consolidation phase on Tuesday, having revisited 29-month lows near $1,655 a day before. XAU/USD needs acceptance above $1,680 on a four-hourly closing basis to confirm a triangle breakout, FXStreet’s Dhwani Mehta reports.

XAU/USD bulls to remain cautious below $1,700

“Gold has been traversing within an ascending triangle formation after hitting the two-year bottom last Friday. Bulls are testing the upper boundary of the triangle, which is aligned at $1,680. They need a four-hourly candlestick close above the latter to confirm a triangle breakout. The next upside barrier will be seen at the $1,690 round number, above which the $1,700 threshold could come into play.”

“On the flip side, the bearish 21-Simple Moving Average (SMA) at $1,672 will be the immediate cushion. The next line of defense for XAU bulls is envisioned at the previous day’s low of $1,660. The 29-month low of $1,654 will be back on sellers’ radars should the downside momentum gather steam.”