Gold Price Analysis: $1735 is the level to beat for XAU/USD bulls
The solid recovery staged by Gold (XAU/USD) from near 1700 levels lost leg once again below the critical resistance at 1735, as the prices look to extend the reversal heading into European trading. At the press time, gold trades modestly flat around 1726.50 levels, having breached the crucial resistance-turned-support at 1727.35, the confluence of the 50 and 100-hourly Simple Moving Average (HMA).
Sellers look for entry below the latter, with the next target seen at the 21-HMA, now located at 1721.51. Should the bulls fail to defend the 21-HMA support, the horizontal 200-HMA at 1714.56 could be put to test en route Monday’s low of 1704.28.
Gold looks to extend Monday's bounce as dollar remains weak
Gold is looking to extend Monday's bounce from $1,704 to $1,724 amid sustained weakness in the US dollar, the yellow metal's biggest nemesis. At press time, the safe-haven metal is changing hands near $1,722, representing 0.16% gains on the day. Meanwhile, the dollar index, which tracks the value of the greenback against majors, is hovering near 96.50, down 0.12% on the day.
The index fell by nearly 0.5% on Monday, helping gold reverse a major portion of the early decline after the Federal Reserve announced that it would start purchasing corporate bonds through the secondary market corporate credit facility (SMCCF).
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