• Gold price resumes the recovery momentum as DXY drops with yields.
  • Gold’s four-hour chart shows a likely advance towards $1766, $1771 levels.
  • US Prelim Michigan Consumer Sentiment holds the key this Friday.

Gold price extended the previous recovery momentum into the first half of Thursday’s trading and went to hit fresh three-day highs at $1758. The US dollar remained on the defensive amid fading hawkish Fed expectations, in light of softer-than-expected US Consumer Price Index (CPI) data. However, the tide turned in favor of gold bears after the US Producer Price Index (PPI) came in higher than expected and revived the Fed’s tapering bets, lifting the dollar alongside the Treasury yields. A tepid 30-year auction also put a fresh bid under the 10-year US yields, capping gold’s recovery. Gold price closed the day at $1753, marginally higher on the day. The narrative over a potential Fed’s monetary policy normalization continued to drive the sentiment around the dollar and gold price.  

On the final trading day of the week, the greenback is tracking the weakness in the US rates, as the ongoing spread of the Delta covid variant and Chinese regulatory curbs dent the appetite for higher-yielding assets. Therefore, gold price has regained the bullish momentum, although the bulls remain cautious ahead of the US Preliminary Michigan Consumer Sentiment data, which is seen steady at 81.2 in August. A downside surprise on the US sentiment gauge could weigh on the Fed’s tapering expectations, bossing well for gold price. Meanwhile, a broader market consensus that the Fed will unveil its tapering plan next month also keeps gold price in a familiar range above $1750 ahead of the key event risk this Friday.

Gold Price Chart - Technical outlook

Gold: Four-hour chart

Gold’s four-hour technical chart shows that the Relative Strength Index (RSI) is edging higher, having recaptured the 50.00 level.  

Gold price, therefore, has room to rise towards the horizontal trendline resistance at $1766, above which the 50-Simple Moving Average (SMA) at $1771.

A weekly closing above the latter will call for a retest of the $1800 mark, negating the near-term bearish bias.

On the flip side, the immediate downside is cushioned by the $1750 psychological level. A firm break below the latter could bring the 21-SMA at $1742 back in the sellers’ sight.

Deeper losses towards the August 11 low of $1724 could be in the offing should the downside momentum accelerate.

 

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 stabilizes near 1.0850 following NFP-inspired selloff

EUR/USD stabilizes near 1.0850 following NFP-inspired selloff

EUR/USD came under strong bearish pressure and declined below 1.0850 as the US Dollar gathered strength on the impressive January jobs report. With Wall Street's main indexes rebounding from daily lows, however, the pair seems to have found support.

EUR/USD News

GBP/USD falls to 1.2100, looks to post large weekly losses

GBP/USD falls to 1.2100, looks to post large weekly losses

GBP/USD turned south and fell toward 1.2100 after the data from the US revealed that Nonfarm Payrolls increased by 517,000 in January. Although the US Dollar Index retreated modestly in the late American session, the pair remains on track to close the week deep in the red.

GBP/USD News

Gold extends slide to fresh mutliweek lows below $1,870

Gold extends slide to fresh mutliweek lows below $1,870

Gold price extended its slide after breaking below $1,900 and touched its lowest level since January 10 below $1,870. With the US January jobs report showing an impressive 517,000 growth in NFP, the benchmark 10-year US Treasury bond yield recovered above 3.5%, weighing heavily on XAU/USD.

Gold News

Assessing the possibility of Bitcoin price crash to $20,000 after US NFP rises to 517,000

Assessing the possibility of Bitcoin price crash to $20,000 after US NFP rises to 517,000

The United States unemployment rate for January came in at 3.4% which is lower than forecast of 3.6%. The NFP data shows that 517,000 jobs were added in January, which is much higher than the expected 185,000.

Read more

Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon stock fell 5.1% afterhours on Thursday as the premier online retailer missed EPS overall for the quarter ending in December and saw growth in its cloud division drop to 20%.

Read more

Majors

Cryptocurrencies

Signatures