UOB Research discusses Spot Gold technical outlook and sees a scope for a decline towards $1670 within the next couple of months.
"The bottom of the weekly Ichimoku chart sits at $1,761 and this level is also close to the Dec 2020 low of $1,764. Spot gold not only cracked this major support level, it also closed below the 55-week exponential moving average for the first time since May 2019. Note that spot gold has not closed below the 55-week exponential moving average since April 2019 and this is also the first time it closed below the Ichimoku cloud since Jan 2019," UOB notes.
"All in, the technical developments suggest further spot gold weakness within these couple of months. The next major support is at $1,670. This level is near the rising trend-line that started from May 2019 and is also close to the June 2020 low. A break of this major support could potentially trigger a sharp sell-off. On the upside, a break of $1,820 would indicate that spot gold is not ready to head lower towards $1,670 just yet," UOB adds.