Gold currently trades around $1755, consolidating the recent rebound ahead of the US Michigan Consumer Sentiment data. In the view of FXStreet's Dhwani Mehta, XAU/USD has room to rise towards $1765-$1770.
US Michigan Consumer Sentiment holds the key this Friday
“The greenback is tracking the weakness in the US rates, as the ongoing spread of the Delta covid variant and Chinese regulatory curbs dent the appetite for higher-yielding assets.”
“Gold has regained the bullish momentum, although the bulls remain cautious ahead of the US Preliminary Michigan Consumer Sentiment data, which is seen steady at 81.2 in August. A downside surprise could weigh on the Fed’s tapering expectations, bossing well for gold price. Meanwhile, a broader market consensus that the Fed will unveil its tapering plan next month also keeps XAU/USD in a familiar range above $1750 ahead of the key event risk.”
“XAU/USD has room to rise towards the horizontal trendline resistance at $1766, above which the 50-Simple Moving Average (SMA) at $1771. A weekly closing above the latter will call for a retest of the $1800 mark, negating the near-term bearish bias.”
“The immediate downside is cushioned by the $1750 psychological level. A firm break below the latter could bring the 21-SMA at $1742 back in the sellers’ sight. Deeper losses towards the August 11 low of $1724 could be in the offing should the downside momentum accelerate.”
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