• Gold holds onto Friday’s recovery gains, well above $1850.
  • US dollar dips as stocks rise on covid vaccine progress.
  • All eyes remain on US Markit PMIs, covid and vaccine updates.

Despite a green day last Friday, Gold (XAU/USD) fell for the second straight week and held onto the critical $1850 support. Fresh calls for US fiscal stimulus kept the gold buyers alive, although the further upside remained elusive amid vaccine progress. US Treasury Secretary Steven Mnuchin on Friday hinted that the stimulus talks would continue just a day after halting Fed’s emergency lending program. The US dollar suffered alongside stocks, in the face of the Fed-Treasury clash, spiking COVID-19 cases and fresh lockdowns in the US cities, which lifted the sentiment around gold.

Gold clings onto the recent recovery gains so far this Monday, benefiting from the persistent weak tone seen around the US dollar amid the vaccine optimism. Increased expectations over the rapid rollout of the covid vaccines on both sides of the Atlantic weigh on the safe-haven greenback. The UK is likely to give a green signal to Pfizer’s vaccine by the end of this week while a top US health official said that the vaccinations could start in three weeks. However, gold’s upside could be capped by the risk-on rally in the global stocks. On the macro front, the US Preliminary Markit Manufacturing and Services PMIs will be featured later in the NA session. Also, the global covid statistics and vaccine updates will be closely followed.

Gold: Short-term technical outlook

Hourly chart


The hourly chart shows that gold remains capped below the horizontal 200-hourly moving averages (HMA) at $1877, which is tough not crack for the XAU bulls.


Meanwhile, the upward-sloping 21-HMA at $1871 offers immediate support, with the hourly Relative Strength Index (RSI) having turned flat while hovering above the midline.

Acceptance above the 200-HMA barrier is critical to reviving the recovery momentum from the powerful $1850 support area. The next upside target is aligned at $1900.

On the flip side, 50-HMA at $1867 is the relevant support, below which the October low of $1860 could be tested. Only a daily close below $1850 could call for a resumption of the correction from record highs of $2075.

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.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD consolidates gains above 1.0300 after US data

EUR/USD consolidates gains above 1.0300 after US data

EUR/USD has gathered bullish momentum and advanced toward 1.0350 on Wednesday before going into a consolidation phase. With the greenback struggling to find demand after soft July inflation data, the pair holds above 1.0300 and clings to strong daily gains.


GBP/USD advances beyond 1.2200 amid renewed dollar weakness

GBP/USD advances beyond 1.2200 amid renewed dollar weakness

GBP/USD has surged above 1.2200 on Wednesday amid broad-based USD weakness. The data from the US revealed that the Core CPI stayed unchanged at 5.9% in July, compared to the market expectation of 6.1%, and triggered a dollar selloff.


Gold struggles to claim $1,800 despite falling US yields

Gold struggles to claim $1,800 despite falling US yields

Gold has fluctuated wildly with the initial reaction to soft July inflation data but failed to attract buyers even after having climbed above $1,800. Falling US Treasury bond yields help XAU/USD stay in positive territory above $1,790 during the American trading hours.

Gold News

Crypto markets tumble, but the worst is yet to come

Crypto markets tumble, but the worst is yet to come

Bitcoin price is trying to undo the gains it witnessed over the last week and is currently at the midway point. This sell-off has caused Ethereum and Ripple prices to follow suit, pausing the rallies that altcoins were experiencing.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!