Gold Price Forecast: XAU/USD remains pressured below $1,770 amid yields rebound, pre-Fed anxiety


Update: Gold prices lack the enthusiasm to enjoy a slight pullback in the greenback on Tuesday. The losses in the US dollar are compensated by the higher US benchmark 10-year Treasury yields. Investors remained cautious ahead of the US Fed’s two-day policy meeting starting later in the day and concluding on Wednesday.

The Fed has given signals on the beginning of tapering but remained tight-lipped on the timing of the rate hike. The precious metal reversed some losses from Monday owing to China’s Evergrnade debt crisis and its ripple effect on the global market. Furthermore, improved economic outlook and prospects of major central banks tightening are acting as headwinds for gold prices. On the lower side, the precious metal is being guarded by persisting coronavirus risks, uneven global economic recovery and China’s regulatory crackdown measures.

 

Gold (XAU/USD) picks up bids to refresh intraday high around $1,765, rising for the second consecutive day, during early Tuesday.

The yellow metal dropped to the lowest since August 11 the previous day before bouncing off $1,742. The corrective pullback gains additional back-up from cautious optimism in the market of late.

Another day of Chinese traders’ absence, as well as a lack of fresh fears, could be cited as the main catalysts for the latest risk-on mood. Furthermore, comments over the United Nations meeting this week signal that the global leaders will agree on the climate change accord and could also overcome fears from Iran, due to no schedule for the direct talks, to favor the risk appetite. On the same line, US President Joe Biden’s push for partnership with the United Nations (UN) to solve the key problems as well as US House Speaker Nancy Pelosi’s hopes for a $3.5 stimulus brightens the mood too.

On the contrary, comments from the global rating agency S&P, signaling that China’s Evergrande will default join the Fed tapering woes to keep the optimists in check.

Against this backdrop, S&P 500 Futures print 0.30% intraday gain, bouncing off a two-month low whereas the US 10-year Treasury yields consolidate the latest losses around 1.31% by the press time.

Moving on, US housing market figures may entertain traders but the headlines over the Fed and China will be crucial to follow for fresh impulse ahead of the all-important Federal Reserve (Fed) monetary policy and China’s return from holidays on Wednesday.

Read: Can the Fed disrupt stock market gains, and why China’s evergrande is causing wobbles elsewhere

Technical analysis

Gold’s rebound from early August levels enables it to regain past July lows, suggesting short-term recovery towards a confluence of 10-DMA and a monthly horizontal line near $1,780.

However, bearish MACD signals hint at the seller’s dominance, which if ignored could direct the gold buyers towards the $1,800 threshold and the double tops surrounding $1,834 afterward.

In a case where the gold bulls manage to cross the $1,834 hurdle, they can aim for June’s top close to $1,917.

Meanwhile, pullback moves remain less worrisome unless staying beyond July’s low of $1,750.

Following that, a horizontal area from August 10, near $1,740-35, will precede the $1,700 round figure to lure the bears.

Gold: Daily chart

Trend: Further recovery expected

Additional important levels

Overview
Today last price 1765.68
Today Daily Change 1.48
Today Daily Change % 0.08%
Today daily open 1764.2
 
Trends
Daily SMA20 1796.65
Daily SMA50 1795.34
Daily SMA100 1815.66
Daily SMA200 1807.5
 
Levels
Previous Daily High 1767.12
Previous Daily Low 1742.3
Previous Weekly High 1808.67
Previous Weekly Low 1745.39
Previous Monthly High 1831.81
Previous Monthly Low 1687.78
Daily Fibonacci 38.2% 1757.64
Daily Fibonacci 61.8% 1751.78
Daily Pivot Point S1 1748.63
Daily Pivot Point S2 1733.05
Daily Pivot Point S3 1723.81
Daily Pivot Point R1 1773.45
Daily Pivot Point R2 1782.69
Daily Pivot Point R3 1798.27

 

 

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