- The XAU/USD trades near the $1,970 level, recording a loss of 0.40%.
- US yields recovered and traders await potential new catalysts to model their expectations on the next Fed moves on a quiet week.
- The week’s highlights are the FOMC minutes on Wednesday.
In Monday's session, XAU/USD is seeing 0.40% losses, trading mainly in the vicinity of $1,970. Key factors driving these changes include a slight recovery in US yields and an uptick in market caution as traders await the reveal of fresh catalysts to continue placing their bets on the Federal Reserve (Fed). In addition, markets continue assessing last week’s inflation data from the US and seek to see any clues in the Federal Open Market Committee (FOMC) minutes from the last November meeting which will be released on Wednesday.
In the last week, the yellow metal’s price gained momentum due to the increasing downward pressure on U.S. yields and the US Dollar due to the soft Consumer Price Index (CPI) figures from the US from October. On Friday, the 10-year yield dropped to 4.38% from its peak in late October at 5.02% to the lowest level since late September. Similarly, the 2- and 5-year rates dropped to their lowest point since September, towards 4.80% and 4.35%, respectively.
On Monday, those rates recovered to 4.90%, 4.47%, and 4.46%, which seems to me to be applying pressure to the non-yielding metal. The question that arises now is if one month of positive inflation figures will be enough to end the Fed’s tightening cycle. Any new evidence of inflation picking up or the economy being overheated can fuel hawkish bets on the Fed, which could affect the price.
XAU/USD levels to watch
The technical indicators on the daily chart reflect uncertainty in the short-term momentum. Despite this, the Relative Strength Index (RSI) enjoys a pleasant sojourn in positive territory, indicating an intact buying momentum. The Moving Average Convergence Divergence (MACD) exhibits flat green bars, signifying a potential deceleration in the bullish charm but not necessarily hint at a complete trend reversal.
In addition, the price is trading just below its 20-day Simple Moving Average (SMA), but above 100-day and 200-day SMAs, suggesting a broader bullish bias. This seemingly contrasts with the bearish short-term sentiment inferred from a recent stall in bulls' action. However, this outlook may also mean that the bulls are taking a breather after a 2.2% winning week before continuing their upward march.
Support Levels: $1,940 (200-day SMA), $1,930 (100-day SMA), $1,900.
Resistance Levels: $1,970 (20-day SMA), $2,000, $2,020.
XAU/USD daily chart
|Today last price||1972.03|
|Today Daily Change||-8.84|
|Today Daily Change %||-0.45|
|Today daily open||1980.87|
|Previous Daily High||1993.47|
|Previous Daily Low||1978.65|
|Previous Weekly High||1993.47|
|Previous Weekly Low||1931.67|
|Previous Monthly High||2009.49|
|Previous Monthly Low||1810.51|
|Daily Fibonacci 38.2%||1984.31|
|Daily Fibonacci 61.8%||1987.81|
|Daily Pivot Point S1||1975.19|
|Daily Pivot Point S2||1969.51|
|Daily Pivot Point S3||1960.37|
|Daily Pivot Point R1||1990.01|
|Daily Pivot Point R2||1999.15|
|Daily Pivot Point R3||2004.83|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.