Gold Price Analysis: XAU/USD drops back below $1700 amid surging Treasury yields
|- XAU/USD’s recovery stalls, faces rejection at 21-SMA on the 4H chart.
- RSI has turned south, pointing to more downside in the near-term.
- The US Treasury yields resume their rally, driving US dollar higher.
Gold (XAU/USD) fails to find acceptance at higher levels, as the ongoing rally in the US Treasury yields continues to underpin the US dollar, capping the upside attempts.
The resumption in the Treasury yields rally comes on the heels of a stronger US NFP report and Senate’s passage of the $1.9 trillion stimulus bill, which boosted the reflation theme.
Amid a data-light US docket, gold traders will continue to take cue from the bond markets and action in the yields for fresh trading impetus.
From a technical perspective, sellers seemed to have returned following a rejection near the downward-sloping 21-simple moving average (SMA), now at $1709.
Gold Price Chart: Four-hour
The XAU bears look to test the falling trendline support at $1679, as the Relative Strength Index (RSI) has also turned south, suggesting more room to the downside.
Ahead of that level, the nine-month lows of $1687 could be tested.
Alternatively, a sustained move above the 21-SMA hurdle could trigger a run towards the bearish 50-SMA at $1736.
Note that the price wavers within a falling wedge formation, with acceptance above the latter could validate the pattern. The near-term bearish bias could negate thereafter.
At the press time, gold trades modestly flat at $1698.80, near-daily lows.
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.