Gold Price Forecast: XAU/USD eyes $1760-55 amid higher yields, bearish technicals
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UNLOCK OFFER- Gold likely to extends its corrective decline towards $1760-55
- Higher Treasury yields offset the impact of USD weakness on XAU/USD.
- Bear cross on 1H chart and RSI below 50.00 point to the downside.
Gold (XAU/USD) pulled back nearly $20 from seven-week highs of $1790 on Tuesday, finishing the day slightly in the red. The rebound in the US Treasury yields triggered the correction in the metal, as upbeat earnings reports and covid vaccine optimism revived the reflation trades and boosted the returns on the market. Further, increased efforts by the Biden administration to reach a deal on the US $2.25 trillion infrastructure plan also added to the renewed upside in the yields. However, the retreat in the global stocks and the US dollar’s continued decline helped put a floor under gold.
In Tuesday’s trading so far, gold is consolidating Monday’s losses before the bears can resume the correction declines. Higher US yields will likely remain a weight on the yieldless gold amid global optimism, as the economic calendar remains scarce on both sides of the Atlantic. Fresh updates on the covid vaccines and US fiscal stimulus will be closely followed for fresh impetus on gold prices.
Gold Price Chart - Technical outlook
Gold: Hourly chart
Gold’s downside appears more compelling in the near term, especially after a bear cross got confirmed on the hourly chart.
The bearish crossover is represented by the 21-hourly moving average (HMA) having pierced the 50-HMA from above.
The Relative Strength Index (RSI) has turned south below the midline, currently trading at 47.45. This indicator suggests that the bears are likely to extend their control.
Strong support at $1761 will get tested if the downside pressure accelerates. That level is the confluence of the horizontal trendline support and ascending 100-HMA.
The next relevant cap is seen at the 200-HMA at $1752.
On the flip side, a sustained break above the $1775 resistance is needed to revive last week’s bullish momentum.
The previous week high at $1784 could be on the buyers’ radars, above which the seven-week tops at $1790 will be retested.
- Gold likely to extends its corrective decline towards $1760-55
- Higher Treasury yields offset the impact of USD weakness on XAU/USD.
- Bear cross on 1H chart and RSI below 50.00 point to the downside.
Gold (XAU/USD) pulled back nearly $20 from seven-week highs of $1790 on Tuesday, finishing the day slightly in the red. The rebound in the US Treasury yields triggered the correction in the metal, as upbeat earnings reports and covid vaccine optimism revived the reflation trades and boosted the returns on the market. Further, increased efforts by the Biden administration to reach a deal on the US $2.25 trillion infrastructure plan also added to the renewed upside in the yields. However, the retreat in the global stocks and the US dollar’s continued decline helped put a floor under gold.
In Tuesday’s trading so far, gold is consolidating Monday’s losses before the bears can resume the correction declines. Higher US yields will likely remain a weight on the yieldless gold amid global optimism, as the economic calendar remains scarce on both sides of the Atlantic. Fresh updates on the covid vaccines and US fiscal stimulus will be closely followed for fresh impetus on gold prices.
Gold Price Chart - Technical outlook
Gold: Hourly chart
Gold’s downside appears more compelling in the near term, especially after a bear cross got confirmed on the hourly chart.
The bearish crossover is represented by the 21-hourly moving average (HMA) having pierced the 50-HMA from above.
The Relative Strength Index (RSI) has turned south below the midline, currently trading at 47.45. This indicator suggests that the bears are likely to extend their control.
Strong support at $1761 will get tested if the downside pressure accelerates. That level is the confluence of the horizontal trendline support and ascending 100-HMA.
The next relevant cap is seen at the 200-HMA at $1752.
On the flip side, a sustained break above the $1775 resistance is needed to revive last week’s bullish momentum.
The previous week high at $1784 could be on the buyers’ radars, above which the seven-week tops at $1790 will be retested.
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