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Gold prices advance on US stimulus hope

 

·         Gold prices rise on Tuesday as expectations of a large US stimulus package uplifting the metal’s appeal.

 

·         Spot gold rose 0.1% to $1,856.33 per ounce while US gold futures gained 0.1% to $1,856.80.

 

·         Chief global market strategist at Axi Stephen Innes said: "if we get the stimulus, gold can break through $1,900."

·         Aiding the rise of gold is the US 10-year Treasury yields hanging near a three-week low. However, the jump of the dollar by 0.1% is has made gold expensive for other currency holders.

 

·         Investors are keeping an eye on the tone of the Fed as it is expected they will stand pat on monetary policies.

 

·         "If the Fed signals that they're not looking to expand stimulus, and puts the seeds out there that they might have to consider exiting sooner than they currently think ... that could be very detrimental for gold," said DailyFX currency strategist Ilya Spivak.

 

 

·         Gold Price Forecast: XAU/USD’s upside appears limited amid strong US dollar, ahead of Fed

 

After good two-way price action, Gold (XAU/USD) settled Monday almost unchanged above the key $1850 level. The XAU bulls failed to sustain at higher levels, as a stronger US dollar capped the upside attempts. The haven demand for the greenback returned, as the risk sentiment soured on skepticism over the US $1.9 trillion stimulus proposal. Rising concerns over the new UK covid strain also boosted the dollar at the expense of the riskier assets.

 

Additionally, speculative positioning and encouraging vaccine news also remained a drag on gold’s prices. The American pharma giant, Moderna, said its Covid-19 vaccine retains neutralizing activity against emerging variants detected in the UK and South Africa. However, the bears managed to draw support from the renewed US-China tensions over the Taiwan route. The US State Department hinted at arms sales while the carrier group enters South China Sea.

 

Looking ahead, gold prices will continue to remain in the recent trading range, with the upside likely limited amid fading prospects of the stimulus package to approved by Congress anytime soon. Meanwhile, resurfacing US-Sino tensions could also buoy the safe-haven gold. Although, the gains could be capped if the risk-aversion worsens on dismal US Durable Goods and Consumer Confidence data and puts a fresh bid under the dollar. Although the losses also appears limited, as investors turn caution ahead of the FOMC decision due on Wednesday.

 

Gold Price Chart - Technical outlook

Gold: Hourly chart

Gold’s hourly chart shows that the price continues to wave in a symmetrical triangle since last Friday.

 

Over the last hours, gold prices has edged higher and recaptured the upward-sloping 100-hourly moving average (HMA) at $1860.

 

The uptick in the spot could be attributed to the confirmation of the bullish crossover after the 21-HMA pierced the 50-HMA from below.

 

If the buying pressure accelerates, gold could test the falling trendline resistance at $1867. A sustained move above that level is needed to take on the $1900 barrier once again.

 

The 14-day Relative Strength Index (RSI) points higher while above the midline, suggesting that there is more room to the upside in the near-term.

 

Alternatively, the 21-HMA support at $1857 could be probed if the 100-HMA support is taken out. Further south, $1851 is the level to beat for the XAU bears. That point is the intersection of the horizontal 200-HMA and rising trendline support.

 

·         Gold Price News and Forecast: XAU/USD bulls target daily extension

 

Gold rises 0.3%, but the market still looks indecisive

Gold is trading near $1,861 per ounce at press time, representing a 0.3% gain on the day. However, the yellow metal is still stuck in the indecisive price range of $1,847 to $1,868, marked by Monday's Doji candle. A close above $1,868 would imply a bullish breakout, while $1,847 is the level to beat for the sellers.

Gold Price Analysis: XAU/USD bulls target daily extension

 

Gold is on the verge of an upside extension on a break of weekly resistance. The bulls are stepping in at a 50% mean reversion on the daily impulse. XAU/USD is making progress with respect to the bullish market structure following a period of consolidation in recovery of the daily correction.

·         Silver rose 0.3% to $25.37 an ounce, platinum lost 0.6% to $1,092.15, and palladium fell 0.2% to $2,329.62.

 

Reference: Rueters, Gulf Today, FXStreet