Gold Price Analysis: XAU/USD looks set to regain $1,800 amid import news, US dollar weakness


  • Gold wavers around two-month top, fades day-start gains off late.
  • China pushes for gold imports after multiple months of sluggish buying, India’s gold imports also rally.
  • US dollar eases amid broad risk-on mood, backed by upbeat US data, faster vaccinations.
  • Challenges to US President Biden’s infrastructure plan, geopolitical worries test the bulls.

Gold struggles to extend the heaviest weekly gains of 2021 while taking rounds to $1,775 during the initial Asian session trading on Monday. Even so, weekend news of China’s push for gold imports and the persistent US dollar weakness favor the yellow metal buyers despite challenges from geopolitics and the coronavirus (COVID-19).

Beijing jumps back to bullion buying, USD remains depressed…

After multiple months of sluggish buying of gold, China is back to the game and recently eased restrictions for banks importing the bullion, per Reuters. The news hints at around 150 tons of gold imports versus the recent average of 10 tons and the year 2019 buying of 75 tons per month. Also in the line were chatters of India’s record gold buying of near 160 tons in March. It’s worth mentioning that India and China are the world’s biggest gold consumers and hints of increased buying from the key customers should help the bullion that recently cheered the US dollar weakness.

Read: Sources: China opens its borders to billions of dollars of gold imports – Reuters

That said, the US dollar index (DXY) dropped to the fresh low since March 18 on Friday after America’s upbeat housing and consumer sentiment joined the league of strong data from the world’s largest economy, reducing the greenback’s safe-haven demand. Also negative to the US dollar could be the run-up in US equities and sluggish Treasuries.

It’s worth mentioning that the US currency’s latest moves seem to pay a little heed to the coronavirus (COVID-19) fears emanating from India and Europe, not to forget geopolitical tussles between America and China, as well as the US-Russia tensions.

Also likely to have challenged the market risk-sentiment, but not, were chatters surrounding US Republican Party members’ readiness to back the smaller infrastructure spending bill than President Joe Biden’s $2.25 trillion package.

Against this backdrop, S&P 500 Futures print mild losses after refreshing the record top on Friday.

Looking forward, a light calendar in Asia may restrict the yellow metal moves. However, the risk catalysts may test the bulls unless the US dollar extends its downward trajectory.

Technical analysis

An ascending trend line from early March, around $1,786, guards immediate upside ahead of the $1,800 round-figure. Alternatively, sellers may not risk entries before witnessing a clear downside break of 50-day SMA level of $1,750.

Additional important levels

Overview
Today last price 1775.83
Today Daily Change 1.08
Today Daily Change % 0.06%
Today daily open 1774.75
 
Trends
Daily SMA20 1735.09
Daily SMA50 1752.17
Daily SMA100 1804.89
Daily SMA200 1857.65
 
Levels
Previous Daily High 1783.85
Previous Daily Low 1759.82
Previous Weekly High 1783.85
Previous Weekly Low 1723.8
Previous Monthly High 1759.98
Previous Monthly Low 1676.87
Daily Fibonacci 38.2% 1774.67
Daily Fibonacci 61.8% 1769
Daily Pivot Point S1 1761.76
Daily Pivot Point S2 1748.78
Daily Pivot Point S3 1737.73
Daily Pivot Point R1 1785.79
Daily Pivot Point R2 1796.84
Daily Pivot Point R3 1809.82

 

 

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