Gold Price Analysis: XAU/USD to see selling pressure once more beyond the quarter-end – OCBC

FXStreet Team FXStreet

Gold managed to eke out gains last week and is now trading at its highest month to-date. Based on current levels of Treasury yields and the dollar, strategists at OCBC Bank view XAU/USD as too rich and trading above the upper band of its fair value range.

See – Gold Price Analysis: XAU/USD to hover around $1850 by end-March 2022 – Deutsche Bank

Key quotes

“The yellow metal is currently supported by a rotation of funds into haven assets, but that is counteracted by the continued rise in Treasury yields and the dollar. If the latter two continue to rise, gold is likely to be pushed back down, especially after the conclusion of quarter-end.”

“Our fair value model for gold sees a trading range for gold at $1610-$1710, which implies gold is currently trading rich above its upper fair value band.”

“We see an opportunity to short gold at current levels and will recommend taking profit at $1660, with a cut-loss threshold at $1780.”

Author

FXStreet Team

FXStreet

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD faces the next support around 1.1600

EUR/USD comes under pressure and retreats for the fourth day in a row on Tuesday, coming closer to the key 1.1600 neighbourhood amid a decent rebound in the US Dollar ahead of the largely expected 25 basis point rate cut by the Federal Reserve on Wednesday.

GBP/USD remains offered below 1.3300

GBP/USD is coming under renewed pressure, surrendering its earlier gains and retreating toward the area below the key 1.3300 support, always on the back of the bid bias in the Greenback and despite earlier hawkish comments from BoE poliymakers.

Gold comfortable above $4,200

Gold is still holding a positive tone around the $4,200 zone per troy ounce on Tuesday, though it’s starting to lose a bit of steam as the US Dollar finds support from stronger-than-expected jobs data. Even so, markets remain confident the Fed will move ahead with a rate cut on Wednesday, which ultimately lends support to the yellow metal.