- DXY sell-off extends amid US stimulus optimism, boosts gold.
- Dovish Fed also offers fresh zest to the XAU bulls.
- All eyes on stimulus talks and US jobs data for fresh impetus.
Gold (XAU/USD) has quickly retraced from fresh monthly highs of $1883, although remains strongly bid amid persistent weakness in the US dollar across the board.
Progress on a potential US fiscal stimulus deal dented the US dollar’s safe-haven allure, bolstering gold’s big break above the $1850 level. Also, adding to gold’s upside is the Fed’s pledge to continue its bond purchase program until its inflation and employment objectives are achieved.
Ample liquidity in the markets renders positive for gold, as it perks up the demand for the metal as a hedge against inflation and currency debasement.
Also, its worth noting that the US real yields have resumed their declining trend, strengthening the bullish case for gold.
“The 10-year real yield fell to -0.98% on Monday, having started the month at -0.89%, according to data provided by the US Department of The Treasury. The nine-basis point decline in the US real yield seems to have put a bid under the yellow metal this month,” FXStreet’s Analyst Omkar Godbole explained.
Looking ahead, the bright metal will remain at the mercy of the dollar dynamics and the market mood while awaiting the US stimulus updates and weekly jobless claims data.
Gold Price Chart: Four-hour
The four-hour chart for the metal shows that the price has broken out from a descending triangle formation earlier today.
The latest leg higher could be attributed to the bullish crossover confirmed over the last hours. The 21-simple moving average (SMA) pierced the 50-SMA from below, validating a bull crossover.
However, the overbought condition on the Relative Strength Index (RSI) warrants caution for XAU bulls. Therefore, a brief retracement towards the pattern resistance now support at $1865 cannot be ruled out in the session ahead.
Further south, the horizontal 200-SMA at $1858 could be back in play.
Alternatively, recapturing the $1900 level would be inevitable if the bulls defy the warning on the RSI.
Gold Additional levels
|Today last price||1879.80|
|Today Daily Change||14.46|
|Today Daily Change %||0.78|
|Today daily open||1864.4|
|Previous Daily High||1865.78|
|Previous Daily Low||1844.88|
|Previous Weekly High||1875.34|
|Previous Weekly Low||1822.22|
|Previous Monthly High||1965.58|
|Previous Monthly Low||1764.6|
|Daily Fibonacci 38.2%||1857.8|
|Daily Fibonacci 61.8%||1852.86|
|Daily Pivot Point S1||1850.93|
|Daily Pivot Point S2||1837.45|
|Daily Pivot Point S3||1830.03|
|Daily Pivot Point R1||1871.83|
|Daily Pivot Point R2||1879.25|
|Daily Pivot Point R3||1892.73|
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.