Gold prices in terms of the US dollar (XAU/USD) extended gains for the second straight session and closed on Monday at 1117.05 levels, having reached highs at 1122.88 on the US data release. The prices spiked to highs beyond 1120 levels after the US Empire state manufacturing index and NAHB housing data disappointed markets, with the US dollar trimming gains across the board. The pair held firmly above 5-DMA located at 1115.88 and managed to close above the last as traders digested the US economic news amid a data-light trading session yesterday.
XAU/USD extends its upbeat momentum in to a third day today and climbs further towards 1120 levels as the US dollar surrendered most gains seen in early European trades as markets await key US housing data due later in the New York session for further USD moves. The prices are seen building on gains from the previous week as investors anticipate the release of a pair of crucial events – CPI & Fed minutes on Wednesday for clear direction on the bullion.
Technicals – Clinging to hourly 50-SMA at 1117
XAU/USD is trading firmer at the moment and finds good support at hourly 50-SMA located at 1117 levels while 5-SMA at 1118 on the daily charts also keeps prices supported. The daily RSI around 52.50 aims higher above the mid lines supporting the ongoing northward moves. Hence, XAU/USD looks to test 1122.88 levels (Aug 17 High), beyond which doors open up for fresh three-week top reached at 1126.78 on Aug 13. A fresh buying interest could be seen above the last, driving the pair towards 1030 – key levels.
However, a failure to surpass previous high the prices could retreat and retest the hourly 50-SMA at 1117 levels. A break below the last, downside remains exposed to 1110-1107 support zone should the US data beats expectations. Overall, the upside bias is likely to persist in the day ahead with bulls fighting hard for a retest of three-week highs.
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