Gold Price Analysis: XAU/USD struggles near multi-day lows, below $1820 level


  • Gold remained under intense selling pressure for the second straight session on Friday.
  • The overnight rebound in the US bond yields underpinned the USD and exerted pressure.
  • The underlying bullish sentiment further dented the precious metal’s safe-haven status.

Gold maintained its offered tone through the early European session and was last seen trading near four-day lows, just below the $1820 level.

The precious metal extended this week's rejection slide from the very important 200-day SMA and witnessed some heavy selling for the second consecutive session on Friday. The US bond market continued reacting to the prospects for the passage of the US President Joe Biden's $1.9 trillion coronavirus stimulus package. This was evident from a goodish rebound in the US Treasury bond yields on Thursday, which, in turn, drove flows away from the non-yielding yellow metal.

Meanwhile, a modest pickup in the US dollar demand was seen as another factor exerting some additional downward pressure on the dollar-denominated commodity. Apart from this, the underlying bullish sentiment in the financial markets further undermined demand for the safe-haven XAU/USD. The progress in COVID-19 vaccinations, along with hopes for a massive US fiscal spending plan has been fueling hopes for a strong global economic recovery and boosting investors' confidence.

From a technical perspective, sustained weakness below the $1826-25 region might have already shifted the near-term bias back in favour of bearish traders. Some follow-through selling below the $1818 level will add credence to the negative outlook and turn the XAU/USD vulnerable to retest the $1800 mark. The downward trajectory could further get extended towards two-month lows, around the $1785 region touched on February 4, and November 2020 swing lows near the $1764 zone.

Friday's US economic docket highlights the only release of the Michigan Consumer Sentiment Index for February and might influence the USD price dynamics. Traders might further take cues from the US bond yields and the broader market risk sentiment to grab some short-term opportunities on the last day of the week.

Technical levels to watch

XAU/USD

Overview
Today last price 1818.98
Today Daily Change -7.42
Today Daily Change % -0.41
Today daily open 1826.4
 
Trends
Daily SMA20 1839.82
Daily SMA50 1859.56
Daily SMA100 1869.72
Daily SMA200 1856.77
 
Levels
Previous Daily High 1847.64
Previous Daily Low 1821.22
Previous Weekly High 1871.9
Previous Weekly Low 1785.02
Previous Monthly High 1959.42
Previous Monthly Low 1802.8
Daily Fibonacci 38.2% 1831.31
Daily Fibonacci 61.8% 1837.55
Daily Pivot Point S1 1815.87
Daily Pivot Point S2 1805.33
Daily Pivot Point S3 1789.45
Daily Pivot Point R1 1842.29
Daily Pivot Point R2 1858.17
Daily Pivot Point R3 1868.71

 

 

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