• Gold flirting with the 200-DMA as markets await Biden's rescue plan.
  • US dollar correcting as US yields firm on economic recovery hopes.

Further to the prior analysisGold Price Analysis: XAU/USD's recovery at odds with the US dollar's daily chart, the price of gold remains anchored.

Rising rates continue to place a wet towel on gold markets with spot gold now flirting with a break below the 200-DMA.

''Complacent positioning in gold is being shaken-up by a rise in rates, and with positioning still stretched, the aggressive rise in Treasury rates is placing continued pressure on the consensus-long gold market, which could still threaten a deeper positioning squeeze,'' analysts at TD Securities explained. 

As for the DXY, prospects of higher government spending by President-elect Joe Biden's incoming administration and a vaccine plan has led to a rise in US Treasury yields, supporting the greenback.

The US dollar has also benefitted from expectations of a continued economic recovery in the United States while countries in Europe resort to lockdowns to fend off a second COVID-19 wave.

''This doesn't bode well for gold flows, particularly given that gold is an inflation-hedge asset only inasmuch as the Fed's stance on rates translates into a low rates vol environment,'' the analysts at TD Securities argued.

''However, recent fedspeak has pushed back against the need to immediately extend the weighted-average maturity of their Treasury purchases, suggesting officials are willing to test the resilience of equity markets against higher rates''.

XAU/USD

Overview
Today last price 1848.82
Today Daily Change 1.50
Today Daily Change % 0.08
Today daily open 1847.32
 
Trends
Daily SMA20 1883.27
Daily SMA50 1863.76
Daily SMA100 1888.86
Daily SMA200 1843.43
 
Levels
Previous Daily High 1857.6
Previous Daily Low 1828.54
Previous Weekly High 1959.42
Previous Weekly Low 1828.27
Previous Monthly High 1906.87
Previous Monthly Low 1775.52
Daily Fibonacci 38.2% 1839.64
Daily Fibonacci 61.8% 1846.5
Daily Pivot Point S1 1831.37
Daily Pivot Point S2 1815.43
Daily Pivot Point S3 1802.31
Daily Pivot Point R1 1860.43
Daily Pivot Point R2 1873.55
Daily Pivot Point R3 1889.49

 

 

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