Gold testing eight-year highs at $1747
|- XAU/USD rally from $1690 extends to test 8-year highs at $1747
- Gold prices crawl higher as the US dollar dips after negative US retail sales
XAU/USD’s 4-day rally from $1690 lows has extended on Friday, buoyed by the dismal market sentiment and downbeat macroeconomic data, to reach one-month highs above $1,740, only a handful of pips below $1,747, the highest price since November 2012.
Gold rallies with US dollar losing its footing
The precious metal has been trading higher this week as market fears about the second wave of COVID-19 infections have dampened hopes about a quick economic recovery in the countries that started easing restrictions. Beyond that, the escalating tensions between the US and China have increased aversion to risk, with the investors looking for shelter in safe havens like gold.
On the data front, the negative impact of US retail sales data on the dollar has also been supportive of the XAU/USD. The USD has lost ground across the board after the US Census Bureau reported a record 14,6% decline on retail consumption in April, beating market expectations of a 12,5% drop.
The 4-hour charts show the pair well into overbought territory, after having rallied about 2.7% over the last four days, which suggests that the pair might take a break before confirming above April’s high.
With the Irish off sentiment likely to prevail during the next sessions, as macroeconomic indicators continue illustrating the global impact of the pandemic, the pair could well extend break beyond $1744. Once above here, next targets would be October 2012 highs at $1.796 before attempting to attack September 2011 highs at $1921.
XAU/USD key levels to watch
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.