XAU/USD outlook: Gold extends advance, inflated by US stimulus hopes
|GOLD
Spot gold hit new two-week high ($1872) on Tuesday, in extension of previous day's 1.3% advance, the biggest one-day rally since Dec 1.
Fresh hopes on a US fiscal stimulus deal to support the economy hurt by surging coronavirus infections, deflated dollar and provided fresh boost to the yellow metal.
Markets are pricing in that a deal will be reached and focusing on the size of the package, with expectations for the lower amount than markets anticipate that would provide further support for gold.
Fresh advance probes through 50% retracement of $1965/$1764 bear-leg and pressures falling 55DMA ($1877), break of which would expose key barriers at $1888/94 (Fibo 61.8%/daily cloud base).
Rising 14-d momentum is about to break into positive territory and magnetic thinning daily cloud support the near-term action, but overbought stochastic warns.
Traders focus on two key drivers – US stimulus and Brexit - and remain cautious as another stall in stimulus talks and prolonged Brexit uncertainty, could bring gold price under fresh pressure.
Broken 30DMA provides immediate support at $1861, with key supports at $1844/41 (20DMA/broken Fibo 38.2%)
Res: 1872; 1877; 1888; 1894
Sup: 1861; 1850; 1844; 1841
Interested in XAU/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.