Gold Price Forecast: XAU/USD extends recovery toward $1,670
- A weaker dollar and risk appetite offers support to gold on Monday.
- US yields off lows, limiting upside in XAU/USD.
- XAU/USD facing resistance at $1,670, building support around $1,660.
Gold is rising on Monday, recovering from the two-week low it hit on Friday at $1,639. After the beginning of the American session it peaked at $1,668 and then pulled back to the $1,660 area.
The recovery in gold is being driver by lower yields and a weaker US dollar. The US Dollar Index (DXY) is falling by 0.90% and it tested the weekly low at 112.15. The US 10-year yield stands at 3.95% while the 2-year at 4.44%.
In Wall Street, stocks are recovering sharply after Friday’s slump. The Dow Jones rises by 1.75% and the Nasdaq gains 3.21%. Crude oil is flat for the day while silver is up 2.25%.
Resistance ahead around $1,670
The upside in gold lost momentum before $1,670; a level that is a key resistance. A break higher would expose the next barrier which is the $1,680 area. A daily close above would be a positive technical development for gold bulls.
On the flip side, the immediate support is the $1,660 zone. Below the next level is the critical $1,640 that capped the downside last week. If XAU/USD drops below it could accelerate the move lower.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
