Gold Price Analysis: XAU/USD slumps toward $1,710 on improving risk sentiment


  • Gold is struggling to find demand as risk flows start to dominate markets.
  • US Dollar Index clings to small daily gains above 97.00.
  • Wall Street looks to open in the positive territory.

After spending the first half of the day moving sideways above $1,720, the troy ounce of the precious metal started to weaken ahead of the American session. As of writing, the XAU/USD pair was trading at $1,714, losing 0.75% on a daily basis.

Will the risk rally continue?

Improving risk sentiment seems to be weighing on safe-haven gold on Wednesday. German biotech firm CureVac announced on Wednesday that they could have their coronavirus vaccine on the market in mid-2021. Moreover, Germany's Cabinet approved the extra budget to finance the stimulus package and provided an additional boost to the risk-on flows.

Reflecting the upbeat market mood, major European equity indexes are rising between 0.5% and 0.7% on the day. In the meantime, the S&P 500 futures are up 0.45%, suggesting that Wall Street is looking to open in the positive territory.

Building Permits and Housing Starts will be featured in the US economic docket on Wednesday. Nevertheless, investors are unlikely to react to these data. More importantly, Jerome Powell, Chairman of the Federal Reserve System, will be testifying before the Senate on the second day of the semiannual monetary policy report. Ahead of these events, the US Dollar Index is clinging to small daily gains above 97.00, allowing the bearish pressure to remain intact.

Technical levels to watch for

XAU/USD

Overview
Today last price 1714.64
Today Daily Change -13.14
Today Daily Change % -0.76
Today daily open 1727.78
 
Trends
Daily SMA20 1721.72
Daily SMA50 1712.54
Daily SMA100 1653.49
Daily SMA200 1576.53
 
Levels
Previous Daily High 1732.9
Previous Daily Low 1716.75
Previous Weekly High 1744.75
Previous Weekly Low 1677.73
Previous Monthly High 1765.38
Previous Monthly Low 1670.72
Daily Fibonacci 38.2% 1726.73
Daily Fibonacci 61.8% 1722.92
Daily Pivot Point S1 1718.72
Daily Pivot Point S2 1709.66
Daily Pivot Point S3 1702.57
Daily Pivot Point R1 1734.87
Daily Pivot Point R2 1741.96
Daily Pivot Point R3 1751.02

 

 

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