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.

Omkar Godbole FXStreet Contributor

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

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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