Gold dropped as expected after failing to stay above 1,784. As I've mentioned in my previous analyses, XAU/USD may extend its downside movement if it drops below 1,784 former low. Now, it has dropped below the said level signaling strong sellers and a potential further drop.
It's traded far below the downtrend line. The outlook is bearish. Gold may resume its downside movement as long as it stays below the downtrend line.
Trading conclusion
Gold could continue to drop towards new lows if it stays below the 1,754 broken downside obstacle, the former low. The lower low of 1,726 is seen as a major downside target. It could drop deeper despite temporary rebounds.
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