XAU/USD Current price: $1,852.84
- Tensions between the US and China weighed on the market sentiment.
- US Dollar demand eased after Wall Street’s opening, as stocks reversed last week losses.
- XAU/USD pressures a fresh weekly low and could keep falling ahead of US first-tier data.
Spot gold is under pressure on Monday, pressuring a February low of $1,852.25, maintaining the downward bias despite easing demand for the US Dollar. The Greenback appreciated throughout the Asian session but preserved its strength only vs gold by Wall Street’s opening, as the positive tone of American indexes played against the USD.
Tensions between the United States and China undermined the market mood as the US shot down a third suspected Chinese spy balloon over the weekend, this time one on Canadian territory. The US also warned of a fourth suspected flying object overflying Latin America.
European stock markets, however, managed to stay in the green, helping their American counterparts to also trade in positive territory. US indexes advance after edging sharply lower last week amid uncertainty about the US Federal Reserve monetary policy path. US inflation figures on Tuesday could shed some light on the matter. US government bond yields, in the meantime, are mixed ahead of the release of the US January Consumer Price Index (CPI). Yields are up at the lower end of the curve, while the 10-year note currently yields 3.72%, down 2 bps.
XAU/USD price short-term technical outlook
The XAU/USD pair is under selling pressure and at risk of falling further, according to technical readings in the daily chart. The 20 Simple Moving Average (SMA) gains bearish traction above the current level, while technical indicators maintain their bearish slopes within negative levels, currently at fresh three-month lows. The 100 SMA advances far below the current level and is about to cross above a flat 200 SMA, the latter around $1,776.
Gold is poised to extend its decline also in the near term. The 4-hour chart shows that technical indicators maintain their bearish slopes well below their midlines, as bounce attempts result in lower highs. Furthermore, XAU/USD develops below a bearish 20 SMA, accelerating its decline below the longer ones. The lack of bearish momentum at the time being is directly linked to caution ahead of US inflation data, although lower lows are still likely ahead of the daily close.
Support levels: 1,847.60 1,835.10 1,824.60
Resistance levels: 1,860.20 1,872.20 1,881.90
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
GBP/USD holds recovery gains above 1.2900 ahead of BoE policy decision
GBP/USD builds its recovery momentum above 1.2900 in European trading on Thursday, moving away from its lowest level since mid-August. Traders adjust their positions ahead of the key BoE and Fed monetary policy announcements.
EUR/USD stays firm near 1.0750 amid US Dollar pullback
EUR/USD holds higher ground near 1.0750 in the European session on Thursday. The pair finds support from a broad US Dollar retreat, as traders unwind their Trunp win-inspired USD longs ahead of all-important Fed policy announcements.
Gold price faces challenges due to decline in safe-haven flows, awaits Fed rate decision
Gold price (XAU/USD) faced challenges as the dollar-denominated precious metals struggled due to a stronger US Dollar (USD) following the victory of former President Donald Trump in the US election.
BoE set for a second interest rate cut this year on Thursday
Market consensus points to further easing by the Bank of England's (BoE) upcoming interest rate decision on Thursday. The BoE has held rates steady at 5.00% in the previous gathering, but shifting investor sentiment now suggests a possible 25-basis-point cut this week.
Trump wins: Tax cuts come with a cost
Donald Trump’s victory will ensure a lower tax environment that should boost sentiment and spending in the near term. However, promised tariffs, immigration controls and higher borrowing costs will increasingly become headwinds through his presidential term.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.