Gold: Bulls struggle to capitalize on defense of key support


  • Gold held on to key support at $1,548 on Wednesday. 
  • The bulls are struggling to force a strong bounce amid risk rebound and an uptick in treasury yields. 

Gold defended key support on Wednesday, but so far, a strong bounce has remained elusive. 

The yellow metal bulls absorbed selling pressure near $1,548 - the 38.2% Fibonacci retracement of the rally from $1,445 to $1,611 - and closed Wednesday with 0.20% gains at $1,556, snapping a two-day losing streak. 

The bulls, however, are struggling for follow-through. At press time, gold is trading at $1,555 per Oz, having hit a high of $1,558 earlier today. 

A strong bounce has remained elusive likely due to dollar strength. The dollar index, which tracks the value of the greenback against majors, is currently holding at 98.30, its highest level since Dec. 2.

Meanwhile, the US 10-year treasury yield has also adopted a strong upward trajectory recently. The benchmark yield rose by more than 6 basis points on Wednesday and is currently trading at 1.65%. 

Both yields and the dollar index could continue to gain altitude on Wednesday, courtesy of risk rebound. The futures on the S&P 500 are currently adding 0.27%, having risen by more than 1% on Wednesday. 

Gold, therefore, risks falling to key support at $1,548. The support may hold ground if the weekly US Jobless Claims and Nonfarm Productivity (Q4) prints well below the estimate. 

Technical levels

XAU/USD

Overview
Today last price 1555.58
Today Daily Change -1.44
Today Daily Change % -0.09
Today daily open 1557.02
 
Trends
Daily SMA20 1563.42
Daily SMA50 1522.01
Daily SMA100 1504.91
Daily SMA200 1456.19
 
Levels
Previous Daily High 1562.46
Previous Daily Low 1547.56
Previous Weekly High 1589.79
Previous Weekly Low 1563.46
Previous Monthly High 1611.53
Previous Monthly Low 1517.1
Daily Fibonacci 38.2% 1556.77
Daily Fibonacci 61.8% 1553.25
Daily Pivot Point S1 1548.9
Daily Pivot Point S2 1540.78
Daily Pivot Point S3 1534
Daily Pivot Point R1 1563.8
Daily Pivot Point R2 1570.58
Daily Pivot Point R3 1578.7

 

 

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