Gold Price Analysis: XAU/USD retreats from one-week tops, on the defensive below $1810 level


  • A combination of factors failed to assist gold to capitalize on the early uptick to one-week tops.
  • The underlying bullish tone in the financial markets capped gains for the safe-haven commodity.
  • The recent rally in the US bond yields also held bulls from placing bets around the yellow metal.

Gold struggled to preserve modest intraday gains to one-week tops and was last seen hovering near the lower end of its daily trading range, just below the $1810 level.

The precious metal gained some traction during the early part of the trading action on Tuesday and built on the recent strong rebound from multi-month lows, around the $1760 region. The uptick was supported by a softer tone surrounding the US dollar, which tends to benefit the dollar-denominated commodity.

That said, the underlying bullish tone in the financial markets undermined demand for traditional safe-haven assets and capped the upside for the XAU/USD. Investors' appetite for perceived riskier assets remained supported by the impressive pace of COVID-19 vaccinations and hopes for a strong global economic recovery.

Adding to this, the progress on US President Joe Biden's proposed $1.9 trillion stimulus package further fueled the reflation trade. The prospects for a massive US fiscal spending plan pushed the yield on the benchmark 10-year bond to fresh one-year tops. This was seen as another factor capping gains for the non-yielding yellow metal.

Meanwhile, the downside remained cushioned, at least for the time being, as investors seemed reluctant to place aggressive bets ahead of the Fed Chair Jerome Powell's testimony later this Tuesday. Powell is expected to reassure ultra-accommodative policy stance, which could potentially calm bond markets and extend some support to the XAU/USD.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the recent recovery move might have already run out of steam. A sustained weakness back below the $1800 mark will be seen as a fresh trigger for bearish traders and set the stage for the resumption of the metal's prior depreciating trend.

Technical levels to watch

XAU/USD

Overview
Today last price 1808.51
Today Daily Change 0.23
Today Daily Change % 0.01
Today daily open 1808.28
 
Trends
Daily SMA20 1820.92
Daily SMA50 1852.79
Daily SMA100 1863.03
Daily SMA200 1859.52
 
Levels
Previous Daily High 1812.7
Previous Daily Low 1780.75
Previous Weekly High 1827.11
Previous Weekly Low 1760.72
Previous Monthly High 1959.42
Previous Monthly Low 1802.8
Daily Fibonacci 38.2% 1800.5
Daily Fibonacci 61.8% 1792.95
Daily Pivot Point S1 1788.45
Daily Pivot Point S2 1768.63
Daily Pivot Point S3 1756.5
Daily Pivot Point R1 1820.4
Daily Pivot Point R2 1832.53
Daily Pivot Point R3 1852.35

 

 

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