Gold Price Analysis: XAU/USD bulls unstoppable, renews life-time highs near $2040
|- Dip buying in gold once again pushes the bulls towards $2050.
- Fresh leg down in the US dollar, the main catalyst behind fresh highs.
- Tumbling US yields, geopolitical concerns keep the bulls hopeful.
With ‘buy the dips’ emerging as the main underlying theme behind the gold (XAU/USD) price action so far this week, the bulls flex their muscles further to record fresh all-time highs near $2040.
The spot found solid support around $2010 level earlier in the Asian session after the profit-taking slide from the previous record high of $2031.20. The buyers saw it as a bargain-hunting opportunity, with $2050 on their radars.
Fundamentally, the yellow metal continues to draw support from the crumbling US inflated-protected Treasury yields on the narrative of faltering economic recovery from the coronavirus pandemic-induced massive GDP contraction.
The falling US Treasury yields, both real and nominal, continue to exacerbate the pain in the US dollar. At the time of writing, the US dollar index trades near fresh monthly lows of 93.06, down 0.27% on a daily basis.
Further, expectations that the US Congress will agree on a fiscal stimulus package also adds to the bullish momentum in the yieldless gold. Markets now await the US ADP jobs data for fresh hints on the official Non-Farm Payrolls due this Friday. Slowing jobs growth could likely intensify the US economic concerns, boosting the bright metal at the expense of the greenback.
Gold Technical levels
The hourly Relative Strength Index (RSI) has once again turned north and flirting with the entrance of the overbought territory, backing the case for dip-buying. The record highs could be retested if the buyers regain control en route the critical $2050 psychological level. A break below the 21-HMA support could call for a drop towards the next support of the upward-sloping 50-HMA at $1985.35.
Gold additional 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.