Gold Price Analysis: XAU/USD flirts with multi-month lows, below $1690 level


  • A combination of factors prompted some fresh selling around gold on Monday.
  • Rising US bond yields continued underpinning the USD and exerted some pressure.
  • A softer risk tone might help limit any further losses for the safe-haven XAU/USD.

Gold maintained its offered tone through the mid-European session and was last seen hovering near the lower boundary of its daily trading range, just below the $1690 level.

The precious metal failed to capitalize on its early uptick, instead met with some fresh supply near the $1714 region and has now drifted back closer to nine-month lows touched on Friday. The US dollar kicked off the new week on a strong footing and shot to three-month tops in reaction to the passage of a massive US fiscal stimulus bill. This, in turn, was seen as a key factor that kept a lid on the early uptick, rather prompted some fresh selling around the dollar-denominated commodity.

The US Senate on Saturday voted 50-49 in favour of US President Joe Biden's $1.9 trillion pandemic relief package and triggered another sell-off in the US fixed income market. This, along with concerns about higher inflation, pushed the yield on the benchmark 10-year US government bond closer to 1.60%, or over one-year tops touched in the aftermath of stunning NFP report on Friday. This was seen as another factor underpinning the USD and driving flows away from the non-yielding yellow metal.

Meanwhile, the bond market rout raised fears of distressed selling in other asset classes. Apart from this, reports of attacks on Saudi Arabian oil facilities weighed on investors' sentiment. This was evident from a softer tone around the equity markets, which extended some support to the traditional safe-haven XAU/USD and might help limit deeper losses, making it prudent to wait for some follow-through selling before positioning for an extension of the recent/well-established bearish trend.

There isn't any major market-moving economic data due for release from the US on Monday. Hence, the US bond yields will continue to play a key role in influencing the USD price dynamics. Traders might further take cues from the broader market risk sentiment for some short-term opportunities around the XAU/USD.

Technical levels to watch

XAU/USD

Overview
Today last price 1685.76
Today Daily Change -12.44
Today Daily Change % -0.73
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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