- Gold eyes a sustained move above $1800 amid weaker Treasury yields.
- XAU/USD charts a potential bull flag on the hourly sticks.
- All eyes on the US economic data for fresh cues on the dollar and gold.
Gold (XAU/USD) hit fresh three-month highs at $1798 on Monday, kicking off the week on a solid footing. The bulls, however, fell short of the $1800 mark once again, which is now acting as a strong technical hurdle. The yellow metal rallied hard, as the US dollar extended its downside momentum, tracking a fresh sell-off in the Treasury yields. The 10-year US rates briefly dropped below 1.60% amid resurfacing concerns over the economic recovery after the ISM Manufacturing PMI disappointed the optimists, coming in at 60.7 in April vs. 65.0 expectations. Fed’s dovish stance on its monetary policy also keeps weighing negatively on the yields and, in turn, on the dollar.
In Tuesday’s trading so far, gold has eased off the multi-month highs, consolidating the recent upsurge heading into a fresh batch of US economic data. The US ISM-NY Business Conditions Index, Factory Orders and Trade data will offer fresh hints on the economy, which will have a strong bearing on gold prices. In the meantime, Fed Chair Powell’s comments and US dollar bounce keep the metal on the defensive, although weaker yields will likely remain supportive of the recent uptrend.
Gold Price Chart - Technical outlook
Gold: Hourly chart
Gold has carved out a classic bull flag on the hourly chart after Monday’s rally that followed a brief consolidation in Tuesday’s Asian trading.
An hourly closing above the $1793 barrier is needed to validate the upside break, which would challenge the multi-month highs en-route $1800 and beyond.
The Relative Strength Index (RSI) has turned south but remains well above the midline, keeping the upbeat momentum intact.
To the downside, a strong cushion awaits at $1788, which is the convergence of the bullish 21-hourly moving average (HMA) and the falling trendline support.
A sustained break below which would call in a failure to the bull flag pattern, opening floors for a steep drop towards the horizontal 200-HMA at $1779.
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 clings to strong daily gains near 1.0900
EUR/USD trades at its strongest level since mid-October near 1.0900 after starting the week with a bullish gap. The uncertainty surrounding the US election outcome weighs on the US Dollar and helps the pair continue to push higher.
GBP/USD holds above 1.2950 as USD stays under pressure
GBP/USD stays in positive territory above 1.2950 after failing to clear 1.3000 earlier in the day. Heading into the US presidential election, the 10-year US Treasury bond yield is down more than 2% on the day, weighing on the USD and allowing the pair to hold its ground.
Gold treads water below $2,750 amid US election uncertainty
Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions.
Three fundamentals for the week: Toss up US election, BoE and Fed promise a roller coaster week Premium
Harris or Trump? The world is anxious to know the result of the November 5 vote – and may have to wait long hours for the outcome. Markets will also respond to the composition of Congress. The Bank of England and the Federal Reserve will enter the fray afterward.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.