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Gold dips as yields rise, but eyes best week in five

 

·         Gold eased on Friday as U.S. Treasury yields edged higher, although prices were set to post their best week in five helped by a weaker dollar and further stimulus bets.

 

·         For the week, spot gold was up 2.2%, it’s biggest increase since the week of Dec. 18

 

·         U.S. Treasury yields on the longer end of the curve rose along with inflation expectations on Thursday as the market eyed the prospect for additional debt supply under the new U.S. administration.

 

·         Higher yields increase the opportunity cost of holding non-yielding bullion.

 

·         The dollar fell to an over one-week low in the previous session, making gold cheaper for holders of other currencies.

 

·         U.S. weekly jobless claims decreased modestly last week as the pandemic continued to hammer the labor market.

 

·         The European Central Bank reaffirmed its pledge to keep borrowing costs at record lows on Thursday to help the economy weather the pandemic.

·         Gold Price Analysis: Bearish bias intact for XAU/USD while below the $1876 21-DMA

 

Gold (XAU/USD) witnessed good two-way price movements and settled almost changed at $1869 on Thursday. According to FXStreet’s Dhwani Mehta, gold bears are set to retain control below the 21-DMA at $1876 while the focus shifts to the US Markit PMI and President Biden’s speech.

 

Key quotes

“Heading into the weekend, the correction in gold will likely to continue, as markets rethink whether the massive US fiscal stimulus could help stimulate the economic recovery.”

 

“The main drivers remain the US Markit Preliminary Manufacturing PMI and President Joe Biden’s speech for fresh direction on the prices. Biden is due to speak on his administration’s response to the economic crisis.”

 

“A breach of the $1859 50-DMA support could expose the 200-DMA cap at $1848. The next relevant support awaits at $1832, the January 20 low.”

 

“A firm break above the $1876 21-DMA barrier is needed for a test of the horizontal 100-DMA at $1883. However, the path of least resistance appears to the downside so long as the XAU bulls hold below the 21-DMA.”

·         Gold Price News and Forecast: XAU/USD bears to retain control below 21-DMA, focus on Biden’s speech

 

Gold Price Analysis: XAU/USD justifies Thursday’s doji below 21-DMA to drop towards $1,850

 

Gold bounces off intraday low of $1,859.00 to $1,862.10, down 0.37% on a day, during early Friday. The yellow metal refreshed two-week high the previous day but failed to cross a 21-day SMA. The resulted moves portrayed a Doji candlestick on the daily (D1) chart, which in turn gained support from the bearish MACD signals to portray today’s downtick.

 

However, gold sellers seem to struggle off-late as 50-day SMA and an upward sloping trend line from Monday limits immediate declines around $1,859.

Gold Price Forecast: XAU/USD bears to retain control below 21-DMA, focus on Biden’s speech

 

Gold (XAU/USD) witnessed good two-way price movements and settled almost changed at $1869 on Thursday. The yellow metal eased from two-week highs of $1875, as markets resorted to profit-taking after the three-day recovery rally fuelled by the prospects of further stimulus. The uptick in the US Treasury yields on rising inflation expectations and ECB’s inaction also collaborated with the retreat in gold prices. Rejection at the 21-day simple moving average (DMA) further added credence to the pullback in the prices.

·         Gold Price Analysis: XAU/USD eyes 100-HMA support ahead of US PMIs, Biden

 

Gold (XAU/USD) is licking its wounds above $1860, although remains exposed to downside risks amid a broadly stronger US dollar and mixed technical view.

 

The US dollar remains on the bid, drawing haven demand amid potential risks to US President Joe Biden’s $1.9 trillion stimulus proposal and mounting coronavirus concerns globally.

 

Although, the bulls could be rescued by the weakness in the US Treasury yields, as markets turn risk-averse ahead of Biden’s speech due later on Friday at 1945 GMT. The US Markit Preliminary PMIs also remains in focus heading into the weekend.

As observed in the hourly chart, gold wavers in a falling channel formation, with the recovery moves likely capped by $1865. That level is the intersection of the 21-hourly moving average (HMA) and 50-HMA.

 

Also, it’s worth noting that a bearish crossover is formed on the said time frame, as the 21-HMA cuts the 50-HMA from above.

 

Therefore, the bearish pressures remain intact so long as the price holds below the $1865 hurdle.

 

Acceptance above that level could bring the two-week highs of $1875 back in play.

 

To the downside, the channel trendline support at $1856 is likely to be tested, below which the upward-sloping 100-HMA at $1852 will be put at risk.

 

The Relative Strength Index (RSI) points south while trending below the midline, suggesting that there is more room to the downside.