· Gold Price Analysis: XAU/USD climbs back above $1850 level, closer to session tops
Gold managed to rebound around $35-$40 from over one-month lows and was last seen hovering near the top end of its daily range, near the $1855 region.
The precious metal managed to find decent support near the $1817 region and for now, seems to have stalled its recent sharp fall witnessed over the past four trading sessions. The intraday bounce was exclusively sponsored by a softer risk tone, which tends to underpin demand for the safe-haven XAU/USD.
Growing market worries about the continuous surge in coronavirus cases and the imposition of stricter lockdown restrictions in Europe/China weighed on investors' sentiment. This was evident from a modest pullback in the equity markets, which, in turn, drove some haven flows and extended support to the commodity.
However, a bid tone surrounding the US dollar might hold bulls from placing aggressive bets around the dollar-denominated commodity. The greenback remained well supported by the ongoing rally in the US Treasury bond yields, which might further collaborate to cap any meaningful upside for the non-yielding yellow metal.
Investors have been pricing in the prospects for a more aggressive US fiscal spending in 2021, 1, including increased direct payments and considerable infrastructure spending. Friday's disappointing NFP print further fanned the speculations and pushed the US Treasury bond yields to the highest level since March.
This makes it prudent to wait for some strong follow-through buying before confirming that the recent corrective fall is over and positioning for any further appreciating move. In the absence of any major market-moving economic releases, the broader market risk sentiment and the USD/US bond yield dynamics will continue to play a dominant role in influencing the XAU/USD.
· Gold Price Analysis: XAU/USD to post additional losses with a daily close below $1,840
Gold (XAUU/USD) closed last week with heavy losses below $1,850 as the sharp decline amid rising US Treasury bond yields dragged the price below key support levels and triggered additional technical selloffs. The 200-day SMA at $1,840 is the last line of defense for the yellow metal ahead of $1,800, FXStreet’s Eren Sengezer briefs.
Key quotes
“The Consumer Price Index (CPI) report from the US on Wednesday will be the first significant data that could impact the USD’s market valuation. Although the Fed uses the Personal Consumption Expenditures (PCE) Price Index as its preferred gauge of inflation, a lower-than-expected reading could hurt the greenback.”
“On Thursday, Retail Sales and Initial Jobless Claims figures from the US will be looked upon for fresh catalysts. Finally, fourth-quarter GDP data will be featured in the Chinese economic docket on Friday ahead of the University of Michigan’s US Consumer Sentiment Index. Nevertheless, investors will keep a close eye on the performance of US T-bond yields and XAU/USD could find it difficult to turn north if yields continue to edge higher.”
“On the downside, the 200-day SMA at $1,840 aligns as the next critical support. With a daily close below that level, the price could target $1,820 (static support) ahead of $1,800 (psychological level/static support).”
“Resistances, could be seen at $1,870 (50-day SMA), $1,890 (100-day SMA) and $1,900 (psychological level).”
· Gold Price Analysis: Key levels to watch as XAU/USD sees a dead cat bounce – Confluence Detector
Gold (XAU/USD) is attempting a minor bounce from six-week lows of $1817. However, the further upside appears elusive as the Treasury yields continue its surge on US stimulus hopes and drive the US dollar higher.
Investors remain hopeful that US President-elect Joe Biden will announce a bigger fiscal stimulus package when he makes an important economic speech on Thursday.
How is gold positioned on the charts heading into a new week?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that gold has recaptured strong resistance at $1927, which is the Fibonacci 61.8% one-day.
The buyers now target the next relevant upside target at $1940, where the SMA200 one-day lies.
Acceptance above the latter is needed to bolster the recovery momentum, as the $1850 hurdle will come into play. That level is the confluence of the previous high four-hour and Fibonacci 23.6% one-day.
Further up, the Fibonacci 38.2% one-month at $1857 could be tested.
Alternatively, a drop below the abovementioned key resistance now support at $1927 could trigger a quick drop towards $1815, the pivot point one-month S1.
The bears could then challenge the pivot point one-day S1 at $1811, which is the last resort for the bulls.
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