Gold Price Analysis: XAU/USD jumps to three-day tops, around $1720 level

Gold witnessed some short-covering on Tuesday and staged a goodish bounce from nine-month lows.
Retreating US bond yields prompted some USD profit-taking and remained supportive of the move.
The bias remains tilted firmly in favour of bearish traders and supports prospects for further weakness.

Haresh Menghani FXStreet

Gold built on its goodish intraday positive move and climbed to three-day tops, around the $1720 region during the early North American session.

A sharp pullback in the US Treasury bond yields turned out to be a key factor extending support to the non-yielding yellow metal. Retreating US bond yields prompted some US dollar profit-taking, which, in turn, provided an additional boost to the dollar-denominated commodity.

From a technical perspective, oversold RSI on the daily chart remained supportive of the short-covering bounce. Moreover, oscillators on hourly charts have been gaining some positive traction and support prospects for further recovery from nine-month lows touched on Monday.

Meanwhile, technical indicators on the daily chart are still holding deep in the bearish territory. This, in turn, warrants some caution for bullish traders amid the prevalent risk-on mood, which tends to undermine demand for traditional safe-haven assets, including gold.

Hence, any subsequent positive move beyond the $1722-23 region might still be seen as an opportunity to initiate fresh bearish positions. This, in turn, should keep a lid on any further gains for the XAU/USD around the $1739-40 strong horizontal zone.

On the flip side, the $1700 mark now seems to protect the immediate downside. Weakness back below the mentioned handle will reaffirm the bearish outlook and turn the XAU/USD vulnerable to resume its well-established bearish trend witnessed over the past two months or so.

XAU/USD 4-hourly chart

Technical levels to watch

XAU/USD

Overview
Today last price	1718.8
Today Daily Change	38.20
Today Daily Change %	2.27
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

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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