Gold regains $2000 level, technical set favors bulls ahead of US housing data

Gold extends the advance and has just broken $2000 level, having closed above the critical 100-hourly SMA  at $1941 on Monday. XAU bulls continue to benefit from dollar weakness and falling T-yields. What’s more, US-China tussle could offer further support to the yellow metal, FXStreet’s Dhwani Mehta reports.

Key quotes

“The bright metal will continue to draw support from broad-based US dollar weakness amid falling Treasury yields and nervousness ahead of Wednesday’s FOMC minutes. Meanwhile, any escalation on the US-China front could bode well for the safe-haven gold. The focus will be on the US housing data for fresh cues on the economy, especially after the disappointing US Retail Sales and regional manufacturing data undercut the nascent economic rebound.”

“The bulls look to regain the critical $2000 barrier, a break above which will call for a test of the August 11 high at $2030. For the buyers to take on the record highs of $2075, a sustained breakthrough above the $2050 level is critical. That level is the intersection of the August 10 high and psychological level.” 

“The previous resistance-turned-support at $1985.50 will limit the immediate downside. The next cushion awaits at the rising trendline (pattern) support at $1982 below which the bullish 21-HMA at $1976 could be tested. The bears need an hourly closing below the upward-sloping 100-HMA at $1958 to negate the near-term bullish bias. Note that Monday’s rally picked up pace only after the price closed above the 100-HMA, then at $1941, on the hourly chart.”