FX.co ★ Trading Signal for Gold (XAU/USD) for September 23-26, 2022: buy above $1,656 (oversold - 1/8 Murray)

Early in the American session, gold is trading around 1,656, bouncing slightly after falling towards the low of 1641.17, the new low since mid-2020. This bounce is likely to find resistance at the 21 SMA located at 1,667.

Technically, XAU/USD broke a range zone between 1,687 and 1,656 where it has been oscillating since September 16th. If gold consolidates below 1,656 in the next few hours, it is likely to have a downward acceleration and the price could reach the support of 1,625 where 0/8 Murray is located.

The combination of a strong dollar and rising Treasury yields, coupled with pessimism in the markets, is making a negative impact on gold. Technical indicators are showing signs of extreme overselling. However, this rebound is likely to take place in the coming week.

The only safe haven in this time of risk aversion is the US dollar. USDX rose above 112.00, reaching a 20-year high.

We expect gold to consolidate above 1,640 in the next few hours. If this low remains intact, gold is likely to bounce technically. For this, we should wait for a close above 1,656 on the 4-hour chart to buy with targets at 1,667 and 1,687.