XAU/USD Current price:  $1,796.87

  • US Treasury yields remain depressed near fresh weekly lows, weighing on the greenback.
  • Wall Street is up, backed by better than expected earnings reports from big names.
  • XAU/USD retains its bullish stance, despite being overbought in the near term.

Gold has extended its rally to a fresh one-month high of $1,800.58 a troy ounce, currently trading a few bucks below the level. The dollar remains weak on the back of softer US government bond yields and rallying equities. Better than expected earnings reports from big names underpin Wall Street’s gains, including big banks such as Morgan Stanley, Bank of America and Citigroup.

US Treasury yields are down near fresh weekly lows with that on the 10-year note near its intraday bottom at 1.507%, following the release of softer-than-anticipated producer inflation in the country. The Producer Price Index was up 0.5% MoM and 8.6% YoY, higher than the August readings although below the market’s expectations.

Gold price short-term technical outlook

XAU/USD is up for a third consecutive day, although posting a modest advance when compared to Wednesday’s rally.  The daily chart shows that the price is hovering around a bearish 200 SMA, while the 100 SMA capped the intraday advance, both heading lower and developing within a limited range. In the meantime, technical indicators have lost their bullish strength, but consolidate near intraday highs, rather reflecting the ongoing consolidation instead of suggesting upward exhaustion.

In the near term, and according to the 4-hour chart, the bright metal is bullish yet at risk of correcting lower should it fail to break above the 1,800 threshold. Technical indicators in the mentioned time frame consolidate within overbought levels as XAU/USD develops well above its moving averages. The bullish case will be firmer if the metal moves beyond 1,808.63, September 14 daily high.

Support levels: 1,790.59 1,777.75 1,764.35  

Resistance levels: 1,808.63 1,820.02 1,831.90

View Live Chart for the XAU/USD

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