Gold Price Forecast: Bulls side-lined as sentiment leads

Valeria Bednarik FXStreet

XAU/USD Current price: $1,769.56

US Treasury yields jumped to their highest in over three months, fueling demand for the dollar.
A scarce macroeconomic calendar leaves financial assets in the hands of sentiment.
Gold maintains its longer-term bullish stance but may ease further in the upcoming sessions.

Gold jumped to $1,785.11 a troy ounce during the European session as the dollar came under strong selling pressure. However, the American currency recovered following Wall Street’s opening, as yields are once again on the run. The yield on the 10-year US Treasury note jumped to 1.636%, its highest in over three months and holding on to gains. At the same time, equities are also up, with US indexes nearing record highs. The bright metal trimmed intraday gains and currently trades around 1,769. Meanwhile, the absence of relevant fundamental figures keeps financial assets depending on the sentiment for direction.

Gold price short-term technical outlook

XAU/USD has briefly surpassed the 23.6% retracement of its latest bullish run but is now trading below the 38.2% retracement of the same advance. Ever since the week started, the bright metal has met buyers around the next Fibonacci support level at 1,761.00. The daily chart shows that the risk is skewed to the upside, although buyers are still cautious.

Gold is trading above a flat 20 SMA, which converges with the mentioned Fibonacci support, while the longer moving averages head south well above the current level. Technical indicators remain within positive levels, with the Momentum advancing and the RSI directionless, suggesting that buyers outpace sellers.

However, the near-term picture favors a slide toward the lower end of its recent range. The 4-hour chart shows that the bright metal is currently trading below the 20 and 200 SMAs, while technical indicators stand within negative levels. The risk should skew to the downside on a break below 1,761.00 the immediate support level.

Support levels: 1,761.00 1,750.00 1,735.80

Resistance levels: 1,770.40 1,777.75 1,790.59

View Live Chart for the XAU/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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