- Gold remains on track to challenge the $1800 barrier.
- The USD recovery appears shallow amid subdued Treasury yields.
- Rising covid infections, China’s boost to gold imports render XAU-positive.
Gold (XAU/USD) extended its two-day winning streak to reach fresh two-month highs at $1784 on Friday, recording the second straight weekly gains. The weakness in the US dollar induced by the tumbling Treasury yields, in the wake of dovish Fed expectations, emerged as the primary driver behind gold’s upsurge. Gold benefited from the record rally on Wall Street indices, as it weighed on the dollar’s haven demand. Meanwhile, US-Russia geopolitical tensions and the continued rise in the covid infections globally also lifted gold’s safe-haven appeal.
Starting out a fresh week on Monday, gold remains in a bullish consolidative mode near $1780 levels. The upside bias remains intact amid persistent downbeat tone seen around the US rates, which has helped limit the corrective pullback in the greenback. Reports that China has granted domestic and international banks permission to import large amounts of gold into the country could continue to offer support to the gold bulls. Looking ahead, the sentiment on Wall Street and upbeat on the US infrastructure spending plan will be closely eyed for fresh impetus.
According to Business Insider, differences over Donald Trump's salt tax cap are threatening to derail President Joe Biden’s $2.25 trillion infrastructure plan.
Gold Price Chart - Technical outlook
Gold: Hourly chart
Gold’s upside consolidation has taken the shape of a horizontal parallel channel on the hourly sticks, with a sustained break above the channel resistance at $1784 likely to trigger a fresh rally towards the $1796 measured target.
The Relative Strength Index (RSI) has turned flat but holds well above the midline at 58.12, keeping the buyers hopeful.
On the flip side, if the price closes the hourly candlestick below the upward-sloping 21-hourly moving average (HMA) at $1777 then a test of the channel support at $1773 could be in the offing.
The bullish 50-HMA support at $1766 could rescue the XAU bulls. Further down, the psychological $1750 level could challenge the bearish commitments.
All in all, the path of least resistance appears to the upside for gold.
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 holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.