FX.co ★ GOLD Hot Forecast for 4th March, 2021

• Gold failed to preserve its early gains and refreshed daily lows
• Sustained USD buying was seen as a key factor exerting pressure on the metal.
• Oversold conditions on the daily chart warrant some caution for bearish traders.

Gold struggled to capitalize its modest intraday recovery gains, instead met with some fresh supply near the $1,721 region. The commodity refreshed daily lows, around $1,707-06 region in the last hour and remained well within the striking distance of nine-month lows touched on Wednesday.

From a technical perspective, the commodity has been trending lower along a downward sloping channel over the past one month or so. That said, the XAU/USD, so far, has managed to defend the $1,700 mark, which coincides with the lower boundary of the channel. Moreover, technical indicators on the daily chart are flashing oversold conditions and warrants some caution for bearish traders.

This makes it crucial to wait for sustained breakthrough the channel support before positioning for any further depreciating move. The XAU/USD might then accelerate the fall towards testing the $1,675-70 horizontal support and to next major support near mid-$1,600s.

On the flip side, the daily swing highs, around the $1,721-23 region now seems to act as an immediate hurdle. This is followed by resistance near the $1,740 zone, which if cleared might trigger a short-covering move towards the $1760-65 strong support breakpoint.

Only a sustained move beyond will negate the near-term bearish outlook.