XAU/USD Current price: $1,799.53
- Gold plummeted at the start of the year, shedding over $20 per troy ounce.
- US Treasury yields soared to multi-month highs, underpinning the greenback.
- XAU/USD trades at around 1,800 with a firmly bearish stance in the near term.
Spot gold plunged heading into the US opening as US Treasury yields soared. The bright metal started the week with a soft tone amid increased demand for the greenback, although shedding the last $15 in less than an hour. The bright metal staged a modest bounce but resumed its slump with Wall Street’s opening as US stocks trimmed pre-opening gains and dipped in the red. Equities managed to recover some ground, but the greenback kept advancing.
The catalyst of the latest bout of dollar’s strength was the sudden appreciation of US government bond yields, with that on the 10-year Treasury note hitting 1.607%, a multi-month high. The yield on the 2-year note, in the meantime, soared to its highest since March 2020.
Gold price short-term technical outlook
XAU/USD is currently struggling with the 1,800 threshold, as demand for the greenback persists. Gold trimmed its previous two-day gains, and the daily chart shows that it’s flirting with its 200-SMA, while the 20- and 100- SMAs remain directionless, a handful of cents below the longer ones. Technical indicators turned sharply lower and are now within neutral levels, although the firmly bearish tone favors a bearish extension.
The 4-hour chart shows that the price has fallen below its 20- and 200-SMAs, while approaching a mildly bullish 100-SMA, reflecting sellers’ strength. Meanwhile, the Momentum indicator is crossing its midline into negative territory, while the RSI indicator heads lower at around 38, all of which hints at a bearish continuation, particularly on a break below 1,789.30, the immediate support level.
Support levels: 1,789.30 1,778.20 1,765.90
Resistance levels: 1,809.50 1,820.25 1,831.10
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