Gold Price News and Forecast: XAU/USD recovering from the lows and finding some calm on Martin Luther King Day
|XAU/USD: Gold bounces on stimulus hopes but facing strong technical barriers
Spot gold bounced from new 1 ½ month low ($1803) posted in early hours of Monday’s trading as comments from US Treasury nominee Janet Yellen that the US does not seek weaker dollar, slowed greenback’s recovery.
Expectations of new fiscal stimulus package would boost metal’s appeal as an inflation hedge and the US Federal Reserve unlikely to become more hawkish in coming months, would provide additional support to the metal’s price.
Potential recovery from two-week $1959/$1803 fall would face some strong obstacles en-route, as thick daily cloud (spanned between $1842 and $1865) already capped recovery attempts last week.
Surge through the cloud and close above its top would provide initial reversal signal, but bulls need to make first step on sustained break of $1842 pivot (200DMA / daily cloud base).
Gold Price Analysis: XAU/USD at critical crossroads ahead of Biden's inauguration – Confluence Detector
The current stability could be the calm before the next storm around January 20. President-elect Joe Biden is set to enter the White House and kick off his term with a flurry of Executive Orders, on top of pushing the $1.9 trillion fiscal stimulus plan he already presented.
How is XAU/USD positioned on the technical graphs?
The Technical Confluences Indicator is showing that the precious metal is hovering above $1,836, which is a strong support line. It is the convergence of the Simple Moving Average 5-1h, the SMA 5-15m, the Bollinger Band 15min-Middle, and the Fibonacci 38.2% one-week.
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