Gold Price Analysis: XAU/USD looks to regain $1,700 as US Treasury yields drop

Gold consolidates recent losses from nine-month low flashed the previous day.
US stimulus may arrive on Wednesday, US 10-year Treasury yields snap four-day winning streak.
Risks remain mildly bid, US dollar refreshes highest levels since November 2020.

Anil Panchal FXStreet

Gold picks up bids near $1,683, up 0.20% intraday, during early Tuesday. The yellow metal recently benefited from the recent halt in bond rout while also ignoring the US dollar’s sustained rally.

The yellow metal’s run-up could be traced from easing reflation fears after US House Speaker Nancy Pelosi recently signaled that the much-awaited American fiscal stimulus worth $1.9 trillion will be out by Wednesday, versus widely expected Tuesday. The same pulled the US 10-year Treasury yields back, currently down 2.6 basis points (bps) to 1.568%, while snapping a four-day rally.

Even so talks about global economic recovery and a light calendar keep S&P 500 Futures up over 0.20% whereas the US dollar index (DXY) rises to the fresh high since November 24, 2020. It’s worth mentioning that stocks in Asia-Pacific also trade mixed as traders are cautious ahead of the key relief package from America.

On Monday, the yellow metal dropped to the fresh low since June 2020 amid the US dollar rally and strong Treasury yields defying commodity bulls. However, the bears seem to have stopped for a breather while waiting for the US House session on Tuesday.

Additionally, chatters concerning the vaccinations and economic recovery should also be observed as fears of the coronavirus (COVID-19) variants battle unlock efforts in the West. Should the global pick-up extends, the yellow metal may have a further weakness to see.

Technical analysis

Unless breaking a downward sloping trend line from August 2020, currently around $1,675, gold prices are likely to witness corrective pullback amid oversold RSI. Also acting as the strong support are the lows marked during May and June 2020 around $1,670. Meanwhile, an upside clearance of $1,700 threshold will eye for $1,740 before attacking the key hurdle to the north, marked in November last year around $1,765.

additional important levels

Overview
Today last price	1683.56
Today Daily Change	2.96
Today Daily Change %	0.18%
Today daily open	1680.6

Trends
Daily SMA20	1771.56
Daily SMA50	1825.29
Daily SMA100	1846.36
Daily SMA200	1859.82

Levels
Previous Daily High	1714.32
Previous Daily Low	1676.87
Previous Weekly High	1759.98
Previous Weekly Low	1687.37
Previous Monthly High	1871.9
Previous Monthly Low	1717.24
Daily Fibonacci 38.2%	1691.18
Daily Fibonacci 61.8%	1700.01
Daily Pivot Point S1	1666.87
Daily Pivot Point S2	1653.15
Daily Pivot Point S3	1629.42
Daily Pivot Point R1	1704.32
Daily Pivot Point R2	1728.05
Daily Pivot Point R3	1741.77

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.