Gold Price Analysis: XAU/USD bounces off multi-month lows, lacks follow-through


  • Strong follow-through USD buying continued exerting some downward pressure on gold.
  • A softer risk tone, retreating US bond yields helped limit any deeper losses for the metal.
  • The set-up favours bearish traders and supports prospects for a further near-term decline. 

Gold reversed the Asian session dip to fresh multi-month lows and was last seen trading just above the $1720 level, nearly unchanged for the day.

Gold prolonged its recent bearish trajectory and continued losing ground through the early part of the trading action on Tuesday. Sustained US dollar buying was seen as one of the key factors that continued exerting pressure on the dollar-denominated commodity, though a combination of factors helped limit deeper losses.

The greenback remained well supported by the optimism over a relatively faster US economic recovery from the pandemic. The narrative was reinforced by the US ISM Manufacturing PMI, which jumped to a three-year high level of 60.8 in February. This comes amid the progress on a massive US fiscal spending plan, which along with the impressive pace of COVID-19 vaccinations has been fueling the reflation trade.

The negative factor, to a larger extent, was offset by a softer risk tone, which tends to underpin demand for the safe-haven XAU/USD. This, along with a modest pullback in the US Treasury bond yields, extended some support and assisted the non-yielding yellow metal to find some support ahead of the $1700 round-figure mark.

The intraday bounce could further be attributed to some short-covering amid oversold conditions on short-term charts. That said, the overnight rejection near a horizontal support, now turned resistance near the $1760-65 region and the lack of any follow-through buying warrants some caution before placing any bullish bets.

In the absence of any major market-moving economic releases, the USD price dynamics will play a key role in influencing the XAU/USD. Apart from this, the broader market risk sentiment and the US bond yields will also be looked upon to grab some short-term trading opportunities around the commodity.

Technical levels to watch

XAU/USD

Overview
Today last price 1720.98
Today Daily Change -2.78
Today Daily Change % -0.16
Today daily open 1723.76
 
Trends
Daily SMA20 1800.54
Daily SMA50 1842.14
Daily SMA100 1856.19
Daily SMA200 1860.25
 
Levels
Previous Daily High 1759.98
Previous Daily Low 1719.72
Previous Weekly High 1816.07
Previous Weekly Low 1717.24
Previous Monthly High 1871.9
Previous Monthly Low 1717.24
Daily Fibonacci 38.2% 1735.1
Daily Fibonacci 61.8% 1744.6
Daily Pivot Point S1 1708.99
Daily Pivot Point S2 1694.23
Daily Pivot Point S3 1668.73
Daily Pivot Point R1 1749.25
Daily Pivot Point R2 1774.75
Daily Pivot Point R3 1789.51

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD skyrockets to 1.2150 on poor US jobs figures

EUR/USD has hit a new multi-month peak above 1.2150 after the US reported an increase of only 266,000 jobs in April against nearly one million expected. The dollar is under immense pressure. 

EUR/USD News

GBP/USD soars toward 1.40 after disappointing Nonfarm Payrolls

GBP/USD has been extending its gains after the US Nonfarm Payrolls badly disappointed with an increase of only 266,000 jobs in April, nearing 1.40. Earlier, sterling benefited from the UK Conservative Party's gains in local elections. 

GBP/USD News

XAU/USD soars above $1,835 after weak Nonfarm Payrolls

Gold has leaped above $1,835 after the US reported an increase of only 266K jobs in April, far below expectations. Lower US yields support the precious metal.

Gold News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Ripple's victory granted the firm access to the SEC's documents on the three leading cryptocurrencies. The regulatory agency recently denied the possession of these documents.

More Dogecoin News

S&P 500 and Nasdaq: Can the Fed pump anymore after weak jobs report

Well, that was an interesting jobs report. Not too many people were forecasting that one. Just in case you missed it NFP were forecast to come in around the 1 million jobs gained but instead the US only added 266k.

Read more

Forex MAJORS

Cryptocurrencies

Signatures