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
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