- Gold has been riding as US Treasury yields are retreating.
- XAU/USD is on course to break above the downtrend resistance line.
- Momentum on the four-hour chart has turned positive, providing another oomph to bulls.
- Gold Weekly Forecast: XAU/USD snaps three-week winning streak, looks to test $1,760
Sell in May and go away? The adage about stock markets seems irrelevant to gold – at least not on the first day of May 2021. XAU/USD has been staging a substantial move higher, climbing from the bottom of $1,765 to $1,790.50 at the time of writing.
The precious metal – which has no yield – remains highly correlated with returns on US Treasuries. The benchmark 10-year bond yield has dropped to 1.62%, dragging the dollar with it and boosting gold. Markets are content with the Federal Reserve's dovish approach and the ongoing printing of dollars is a bullish factor for XAU/USD.
Nonfarm Payroll figures for April will likely be the main mover for markets, and nervous moves toward that event are set to trigger high volatility.
Gold Technical Analysis
Gold is benefitting from upside momentum on the four-hour chart, while the Relative Strength Index (RSI) is still below 70. XAU/USD bounced off the 100 Simple Moving Average (SMA) and pierced the 50 SMA on its way up. Another milestone is the move above $1,789 that was a sing high earlier on.
The next critical level to watch is $1,797, which held the yellow metal down in late April. It serves as the last nation before the all-important psychological barrier of $1,800.
Support awaits at $1,769, which was a swing low last week, followed by the late April trough of $1,756.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price bulls keenly await US PCE Price Index on Friday before placing fresh bets
Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark on Thursday and oscillates in a narrow trading band through the early part of the European session.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
The other terminal rate: How far will policy rates be cut?
Recent communication by the Federal Reserve and the ECB has made it clear that the first cut in official interest rates is coming. Both central banks are saying the same but the ECB communication is more opaque than that of the Fed.