Gold price bounced off key support in a pennant formation, resistance at $1,993 holds the key, FXStreet’s Dhwani Mehta reports.

XAU/USD needs acceptance above $1,993 for further upside

“Should the rebound pick up steam, Gold price could aim to take out the falling trendline resistance at $1,993. A daily closing above the latter is needed to confirm an upside break from a pennant formation. Doors will then open up for a test of the $2,000 mark, above which the yearly high at $2,010 will be threatened. The next relevant upside target for Gold bulls is seen at the $2,050 psychological level.”

“Failure to sustain the renewed upside will trigger a fresh decline toward strong trendline support, now at $1,959. A sustained break below the latter will validate a pennant breakdown, exposing the $1,950 round level. Gold sellers will then target the previous week’s low at $1,935 should the downside momentum accelerate.”