Gold stays in consolidation mode around $1,840 after rallying to its highest level in two months near $1,850 on Thursday. In the opinion of FXStreet’s Haresh Menghani, XAU/USD bulls are likely to stay on the sidelines.

The $1,830-$1,828 zone to act as immediate support

“Gold showed some resilience below the $1,830 resistance-turned-support and the subsequent strength favours bullish traders. That said, any further move up is likely to confront resistance near last week’s swing high, around the $1,848 region. The next relevant hurdle is pegged near a downward sloping trend-line extending from June 2021 swing high, currently around the $1,860 region. A convincing breakthrough would be seen as a fresh trigger for bullish traders and pave the way for an extension of the recent move up witnessed over the past one month or so.”

“On the flip side, the $1,830-$1,828 zone might continue to act as immediate support, which if broken might prompt some technical selling and accelerate the fall towards the $1,812 horizontal zone. This is followed by the very important 200-day SMA, currently around the $1,805 region, ahead of the $1,800 round figure. Some follow-through selling below an upward sloping trend-line support, extending from the August 2021 swing low, currently around the $1,794 region, will negate any positive bias and turn gold vulnerable.”