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· Gold Price Analysis: XAU/USD to face strong resistance at the $1875-76 area

Gold opened with a bullish gap on the first day of a new trading week, albeit lacked any strong follow-through and remained below three-week tops touched on Friday. XAU/USD bulls now await ascending triangle breakout, FXStreet’s Haresh Menghani reports.

Key quotes

“Market participants now look forward to the US ISM Manufacturing PMI for some trading impetus. The key focus, however, will remain on the broader market risk sentiment and the US stimulus headlines.”

“The recent recovery from the vicinity of the $1800 mark has been along upward-sloping trend-line support. This, along with a strong horizontal resistance near the $1875-76 region, constitutes the formation of an ascending triangle on hourly charts. Ascending triangles have a bullish bias and are typically seen as a continuation pattern, though sometimes mark a reversal.”

“A sustained strength beyond the triangle resistance will suggest that the commodity has bottomed out in the near-term and set the stage for a further near-term appreciating move. Bulls might then aim to reclaim the $1900 mark before pushing the XAU/USD further towards the $1922-24 supply zone.”

“Any meaningful slide might continue to attract some buying near the triangle support, currently near the $1842 region. Failure to defend the mentioned support level will negate the constructive outlook and prompt some technical selling. The precious metal might then accelerate the fall further towards intermediate support near the $1830 region before eventually sliding back to challenge the $1800 round-figure mark.”

Gold Futures: Gains look limited very near-term

Open interest in gold futures markets shrunk by nearly 15.5K contracts on Friday according to flash data from CME Group. In the same line, volume went down for the second session in a row, this time by around 29.1K contracts.

Gold appears capped by $1,880/oz

Friday’s price action in gold was amidst shrinking open interest and volume, hinting at the likeliness that further gains could lose momentum in the very near-term. That said, the 100-day SMA around $1,880 per ounce emerges as the next interim resistance for the time being.

Gold Price News and Forecast: XAU/USD is expect to still continue higher towards 1900

Gold Price Analysis: XAU/USD eyes a rally towards $1880 amid stimulus hopes, bull flag

Gold (XAU/USD) is set to retest daily highs at $1867, having found strong bids around $1850 levels amid a revival of hopes on a likely US fiscal stimulus. All eyes on Biden’s stimulus talks and silver’s price action.

· Gold consumption drops 18% in 2020 due to pandemic

China's gold consumption fell 18.13 percent year-on-year to 820.98 tons in 2020, due to the outbreak of the COVID-19, which hit sales of gold jewelry, figures released by the China Gold Association revealed on Monday.

Consumption of gold jewelry in the Chinese market reached 490.58 tons last year, plunging 27.45 percent year-on-year, while consumption of gold coins and bars went up 9.21 percent year-on-year during the same period to 246.59 tons, the association said. Consumption of gold for industrial and other uses fell 16.81 percent from a year earlier to 83.81 tons.

· Silver shines on retail rush, February revives risk trades, stimulus hopes

Starting out February, markets witnessed a choppy Asian session, with last week’s Wall Street retail frenzy weighing on the sentiment in early trades. Subsequently, investors witnessed a major turnaround in the market mood, as risk rebounded on renewed US stimulus hopes and vaccine optimism.

A tweet from the US Republican Senator Susan Collins cited that President Joe Bidden is set to meet with 10 Republican senators on Monday at 2200 GMT to discuss a compromise stimulus package worth $600 million, as proposed by them.

Meanwhile, easing covid vaccine-related tensions between the EU and UK also cheered the markets. The EU Commission Chief Ursula Von der Leyen said Sunday that AstraZeneca will start deliveries of its COVID-19 vaccines one week earlier than expected.

Silver surged nearly 5% to hit five-and-a-month highs of $29.01 after a weekend that saw a retail buying spree on short squeeze chatter. Retail websites such as Money Metals, SD Bullion, JM Bullion and Apmex noted unprecedented demand for silver bars and coins in a sign of recent Reddit-driven short squeeze spilling over to the physical market.

· Silver closes in on $29 again to start European trading

Silver is on the move once again as it stays underpinned to start the new week. Prices jumped at the open to hit $29 and we are trading thereabouts once again currently.

There is plenty of talk of unprecedented amount of demand as well as there being a lack of offers on the board this morning, helping to keep prices elevated.

As things stand, there is some daily resistance from the 1 September high @ $28.91 but the break of the key trendline resistance and 15 September high @ $27.62 bodes well for buyers in trying to take another shot at $30 once again.

That said, silver is up 14% in just three days so just be wary that there is scope for some profit-taking and a pullback potentially down the road.

• Silver mining stocks soared in Australia and China and Money Metals, an online exchange for precious coins and bullion, posted an “EXTREME DEMAND ALERT” banner across its homepage, and announced it restricted orders to between $1,000 and $10,000.

Volumes in small miners’ stock in Australia were unprecedented and jumps in some exploration firms, which do not actually produce silver, topped 90%. Bullion dealers had brisk trade.

The Perth Mint said it noticed elevated demand for silver in the United States via online dealers.

• Bullion broker Apmex says silver demand is delaying transactions

U.S. bullion broker Apmex has warned of delays in processing silver transactions because of surging volumes, as coin sellers and silver dealers struggle to keep up with demand for the metal from retail traders.

“Due to the increased volume of orders, we are currently expecting a 1-3 day delay in processing times,” said a banner on Apmex’s website.

· India cuts import tax on gold, silver to 7.5% from 12.5%

India slashed the import duties on gold and silver to 7.5% from 12.5%, Finance Minister Nirmala Sitharaman said on Monday, as the world's second biggest gold consumer tries to bring down smuggling of the precious metal.

Gold futures fell more than 3% following the surprise announcement in the annual budget by Sitharaman.

Reference : FXStreet