Gold (XAU/USD) staged an impressive bounce from two-month lows on Friday, although ended the week deep in the red above the $1800 mark. XAU/USD bulls insist on US stimulus optimism but the upside appears limited, FXStreet’s Dhwani Mehta reports.
Key quotes
“The bulls remain hopeful amid the continued broader market optimism on stimulus hopes. Meanwhile, fresh concerns over the covid vaccines’ efficacy against the South African strain could also offer some support to the precious metal.”
“An increase in physical demand for gold ahead of China’s Lunar New Year holiday season and a broadly subdued US dollar could help put a floor under the prices. However, the recovery could remain in check amid rallying Treasury yields and upbeat sentiment on Wall Street.”
“A sustained break below the 21-hourly moving average (HMA) at $1810 is needed to negate the recovery momentum.
“With the 21-HMA having crossed the 50-HMA from below, the buyers keep their eyes on the bearish 100-HMA at $1823. A move above the 100-HMA would expose the 200-HMA hurdle at $1836.”
“The downward-sloping 50-HMA at $1806 could come to the bull’s rescue if the 21-HMA support is caved in. The next relevant support for the bright metal is seen at Friday’s low of $1792.”
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