XAU/USD Current price: $1,797.59
- US stocks are struggling to extend Friday’s gains as caution kicks in.
- Central banks’ announcements and the US Nonfarm Payrolls report in the spotlight.
- XAU/USD maintains a technical bearish stance, now correcting oversold conditions.
Spot gold is up this Monday, trading around $1,797 a troy ounce, after peaking at $1,799.71 ahead of the US opening. Demand for the American dollar paused after the sharp post-Fed appreciation that left the currency in overbought territory against most major rivals. Generally speaking, the market is in a better mood, although maintaining a pitch of caution, as this week will bring three central banks’ decisions and the US Nonfarm Payroll report.
European indexes closed the day with modest gains, underpinning Wall Street. At the time being, most US indexes trade in the green, with only the Dow Jones trading in negative territory, down 30 points. Meanwhile, government bond yields have stabilized as investors finish digesting the latest Federal Reserve’s hawkish announcement and as investors await for US employment figures to be out later in the week.
Gold price short-term technical outlook
Gold’s failed attempt to advance beyond the 1,800 level somehow maintains the risk skewed to the downside. The daily chart for the XAU/USD pair favors another leg lower, as the price is incapable of advancing beyond a flat 100 SMA. The 20 and 200 SMAs remain directionless above the latter. Meanwhile, the Momentum indicator heads firmly lower within negative levels, while the RSI consolidates around 43, hinting at a bearish extension.
The 4-hour chart shows that the risk is on the downside, as the pair is below a firmly bearish 20 SMA, which heads lower almost vertically after crossing below the longer ones. Technical indicators have corrected extreme oversold conditions but lost strength, now flat within negative levels. Bulls may have better chances in the near term if the metal manages to advance beyond $1,803.00, the immediate resistance level.
Support levels: 1,782.60 1,773.80, 1,762.60
Resistance levels: 1,803.00 1.816.95 1,825.90
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