Gold is consolidating its recovery below $1890, as higher US dollar and yields limit the upside. The focus now remains on Powell’s Q&A session during his testimony later on Tuesday, FXStreet’s Dhwani Mehta briefs.
XAU/USD awaits Powell for a meaningful recovery above 100-DMA
“The renewed optimism over the US infrastructure stimulus deal favors gold bulls. Markets also reassess the Fed’s monetary policy goals, especially after the text of Fed Chair Jerome Powel’s testimony released early Tuesday. Powell said inflation had accelerated but should move back toward the central bank’s 2% target once supply imbalances resolve.”
“All eyes remain on the Fed Chair’s Q&A session during his testimony on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis.”
“Gold’s daily chart shows that the price is fast approaching the critical 100-Daily Moving Average (DMA) at $1794, the previous key support now resistance. Gold bulls need to find a foothold above the 100-DMA on a daily closing basis, in order to unleash recovery gains. The next significant resistance awaits at $1797, the June 18 high. Further up, the $1800 round number could come into play, opening doors towards the June 17 highs of $1825.”
“Should the 100-DMA continue to guard the upside, gold price could fall back towards the daily lows of $1782. The $1763-$1760 demand zone will emerge as strong support for the bullish traders.”
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