Gold Price Analysis: XAU/USD advances to fresh session highs above $1,707

• XAU/USD found support below the $1,700 handle on Tuesday.
• Gold continues to trade above the 20-day SMA.
• Initial resistance aligns at $1,720 ahead of multi-year highs.

The troy ounce of the precious metal dropped to a daily low of $1,690 in the early trading hours of the European session but didn't have a difficult time recovering its losses. After moving sideways near the $1,700 mark for the majority of the day, the XAU/USD pair gained traction during the American session and was last seen trading at $1,707.75, adding 0.35% on a daily basis.

XAU/USD technical outlook

The Relative Strength Index (RSI) indicator on the daily chart is inching higher above the 50 mark on Tuesday, suggesting that the bullish momentum in the near-term is picking up. Additionally, XAU/USD remains on track to close the day above the 20-day SMA to confirm the bullish outlook. $1,720 (Apr. 30 high) aligns as the first hurdle before the pair's rally could extend toward $1,750 to test the multi-year highs it set on April 14th. 

On the downside, supports could be seen at $1,700 (psychological level, 20-day SMA), $1,680 (Fibonacci 23.6% retracement of Mar. 20 - April 14 rally) and $1,660 (Apr. 21 low).

XAU/USD daily chart

Additional technical levels