Gold Price Analysis: XAU/USD cheers US stimulus, but yields may cap gains


  • Gold rises in Asia, confirming seller fatigue signaled by Friday's Doji candle. 
  • The US Senate approves Biden's stimulus program, putting a bid under the yellow metal. 

Gold is trading near $1,713 per ounce at press time, up 0.88% on the day, having signaled indecision or seller exhaustion with a classic Doji candle on Friday. 

The yellow metal, a proven store of value asset, looks to have picked up a bid in response to the U.S. Senate's passage of President Joe Biden's $1.9 trillion stimulus bill, which now heads back to the House for clearance. If approved, the bill will pave the way for $1,400 checks and jobless aid. Fiscal stimulus is inflationary.

The gains, however, could be restricted or reversed if the US bond yields continue to rise, diluting the yellow metal's appeal as an inflation hedge. 

The 10-year yield is currently seen at 1.58%, having reached a 12-month high of 1.62% on Friday on the back of upbeat Nonfarm Payrolls data. 

According to some analysts, the stimulus passage, coupled with the strong US data and the blowout China exports data released over the weekend could lift yields. 

Technical levels

XAU/USD

Overview
Today last price 1713.22
Today Daily Change 15.02
Today Daily Change % 0.88
Today daily open 1698.2
 
Trends
Daily SMA20 1779.02
Daily SMA50 1829.15
Daily SMA100 1848.59
Daily SMA200 1860.11
 
Levels
Previous Daily High 1707.76
Previous Daily Low 1687.37
Previous Weekly High 1759.98
Previous Weekly Low 1687.37
Previous Monthly High 1871.9
Previous Monthly Low 1717.24
Daily Fibonacci 38.2% 1699.97
Daily Fibonacci 61.8% 1695.16
Daily Pivot Point S1 1687.79
Daily Pivot Point S2 1677.39
Daily Pivot Point S3 1667.4
Daily Pivot Point R1 1708.18
Daily Pivot Point R2 1718.17
Daily Pivot Point R3 1728.57

 

 

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