XAU/USD Current price: $2,027.49

  • US Treasury yields are on the rise, giving near-term support to the USD.
  • Investors are waiting for the US Core Personal Consumption Expenditures Price Index.
  • XAU/USD gains bearish traction in the near term, but not everything is lost for bulls.

Spot gold trades with a soft tone in the American session, extending its early decline to fresh intraday lows. The bright metal opened the week with a mild bearish gap but quickly filled it to stabilize around $2,035. XAU/USD currently trades below the $2,030 mark, as the US Dollar benefits from an increased caution.

Stock markets trade mixed, reflecting the wait-and-see mood. US indexes consolidate near record highs but fail to extend gains ahead of critical macroeconomic releases scheduled throughout the week. Attention centers around the US Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge, after the unexpected uptick in the  January Consumer Price Index (CPI).

Meanwhile, the USD is finding additional support in raising US Treasury bond yields, up following auctions. The 10-year note currently offers 4.299% after falling to 4.217% earlier in the day.

XAU/USD short-term technical outlook

The daily chart for XAU/USD  shows decreasing buying interest. The bright metal seesaws around a flat 20 Simple Moving Average (SMA) as technical indicators turn lower around their midlines. The bright metal is still developing well above a bullish 100 SMA, while the 200 SMA lacks directional strength well below the latter, suggesting bulls still have the chance to resize control.

In the near term, and according to the 4-hour chart, however, the risk of a bearish extension increased. Technical indicators gain downward momentum below their midlines, while the pair is currently developing below its 20 SMA while struggling to retain ground above a directionless 200 SMA. The bearish case will be firmer if XAU/USD extends its slide through 2,019.60, the immediate support level.

 Support levels: 2,019.60 2,011.40 1,995.35  

Resistance levels: 2,032.50 2,045.20 2,064.90

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