Gold Price Analysis: XAU/USD recovers from 6-week low but bias remains bearish

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Gold charts mild recovery after Monday’s 4.56% crash.
Risks remain skewed to the downside with prices trading well below Monday’s high.

Gold is currently trading near $1,877 per ounce, representing a 0.79% gain on the day, having hit a low of $1,850 during the overnight trade. That level was last seen on Sept. 28.

While prices have bounced from six-week lows, Monday’s bearish engulfing candle is still valid. The safe-haven metal fell by 4.56% on Monday to register its biggest single-day decline since Aug. 11. The sharp slide came after the US pharma giant Pfizer announced positive results of coronavirus vaccine, boosting risk appetite. Besides, the sell-off engulfed or erased gains in the preceding six trading days.

The immediate bias will remain bearish while prices are held below Monday’s high of $1,965. On the downside, the Sept. 28 low of $1,848 is key support, which, if breached, would expose the 200-day simple moving average (SMA) at $1,781.