Gold Price Forecast: XAU/USD extends rebounds from two-month low, hits fresh highs above $1,960

Gold rebounds sharply as government bond yields decline.
XAU/USD climbs $30 from monthly lows to reach five-day highs.

Matías Salord FXStreet

Gold price is rising considerably on Tuesday, supported by a decline in government bond yields. XAU/USD hit a fresh daily high at $1,962 before pulling back towards $1,950.

Earlier in the day, XAU/USD hit a two-month low of $1,931 at the beginning of the European session before jumping more than $30 in a rally that started after Spain's inflation figures.

According to preliminary data, Spain's Consumer Price Index (CPI) dropped 0.1% in May, against expectations of a 0.1% increase, with the annual rate falling from 4.1% to 3.2%. These figures could be anticipating a larger decline in Eurozone inflation, due to be released on Thursday. Germany will report April's preliminary CPI data on Wednesday.

Meanwhile, US economic data will also take centre stage, with the focus on employment figures. ADP will release its report on Thursday, and Nonfarm Payrolls are due on Friday.

Bond yields are falling in Europe and the US, with the 10-year German bund yield standing at 2.37%, the lowest since May 18, and the 10-year Treasury yield at 3.73%, down 1% for the day.

Levels to watch

Despite the recent rebound in XAU/USD, the overall trend remains downwards. If the price manages to consolidate above $1,955, it could provide some support for the bulls and potentially lead to a more sustainable recovery. The next resistance levels are seen at $1,965 and $1,970.

On the flip side, if the price declines below $1,945, it could expose the next support level at $1,935, and then potentially test the recent bottom near $1,930.

Technical levels

XAU/USD

Overview
Today last price	1952.86
Today Daily Change	9.06
Today Daily Change %	0.47
Today daily open	1943.8

Trends
Daily SMA20	1994.66
Daily SMA50	1992.1
Daily SMA100	1935.86
Daily SMA200	1831.41

Levels
Previous Daily High	1949.82
Previous Daily Low	1940.36
Previous Weekly High	1985.3
Previous Weekly Low	1936.77
Previous Monthly High	2048.75
Previous Monthly Low	1949.83
Daily Fibonacci 38.2%	1943.97
Daily Fibonacci 61.8%	1946.21
Daily Pivot Point S1	1939.5
Daily Pivot Point S2	1935.2
Daily Pivot Point S3	1930.04
Daily Pivot Point R1	1948.96
Daily Pivot Point R2	1954.12
Daily Pivot Point R3	1958.42

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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