Gold: Bulls fight back control as dollar trips, technicals point to more gains

FXStreet Team FXStreet

Gold (XAU/USD) started out the week on the front foot, taking cues from the mild gains booked last week. The bulls received a boost on the dual fronts as the US dollar retreated across the board after the vaccine optimism lifted the equities and Iran-US geopolitical tensions also favored safe-haven gold, FXStreet’s Dhwani Mehta reports.

Key quotes

“Over the weekend, AstraZeneca and Oxford University announced that they are set to resume coronavirus vaccine clinical trials in the UK after a week’s pause due to safety concerns. Meanwhile, fresh Iran-US geopolitical tensions alongside the omnipresent US-Sino concerns reinforced gold’s safe-haven demand.”

“In the day ahead, the broader market sentiment and geopolitical developments will continue to influence gold, in absence of relevant US economic releases. However, traders eagerly await the US Federal Reserve monetary policy decision due later on Wednesday for fresh direction in gold.”

“The next barrier on buyers’ radar is the Friday high of $1955, a break above which will put $1960 at risk. Buying interest could accelerate above the latter, opening doors towards Thursday’s high of $1966 en route the pattern target at $1978. The hourly Relative Strength Index (RSI) has turned flat, still holds above the midline, allowing for more gains.”

“To the downside, a failure to close Monday above the $1950 barrier could negate the bullish bias. The bulls are needed to defend the critical support at $1940, the confluence of the 100 and 200-hourly Simple Moving Averages (HMA). A break below which the next key support at $1937 will be attacked.”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.