XAU/USD Current price: $1,897.93
- Speculative interest is closely following government bond yields’ behavior.
- Wall Street retains its positive tone amid strength in the tech sector.
- XAU/USD holds on to modest gains, corrective advance can continue.
XAU/USD rallied early on Tuesday, reaching an intraday high of $1,904.44 during London trading hours. It quickly changed course as the US Dollar found demand following news that S&P Global Ratings downgraded ratings for several United States (US) banks, following a similar move from Moody’s Investors Service last week.
Wall Street trimmed part of its pre-opening gains, while European indexes also eased from their intraday highs but retained the green. US indexes rallied on Monday amid strength in the tech sector, leading to substantial gains in the Nasdaq Composite and the S&P 500. At the time being, equities retain their bullish bias, pushing XAU/USD up from an intraday low of $1,889.12.
The USD is also being affected by government bond yields. The 10-year Treasury note reached multi-year highs on Monday, only to surpass them on Tuesday, hitting 4.366%. It currently hovers around 4.32%, while the 2-year note offers 5.01%, not far from an intraday high of 5.04%.
Market participants show signs of stress before the annual Jackson Hole Symposium featuring words from major central banks’ leaders. US Federal Reserve (Fed) Chair Jerome Powell and European Central Bank (ECB) President Christine Lagarde will speak on Friday.
XAU/USD price short-term technical outlook
The XAU/USD pair preserves modest gains for a second consecutive day while posting a higher high and a higher low, in line with the ongoing corrective advance. Nevertheless, a steeper recovery is out of the picture at the time being. In the daily chart, Gold develops below all its moving averages, with the 20 Simple Moving Average (SMA) extending its slide above the 200 SMA, the latter a few cents above the aforementioned intraday high. Technical indicators, in the meantime, advance within negative levels with limited strength. Furthermore, the Relative Strength Index (RSI) indicator remains near oversold readings, suggesting tepid buying interest.
In the near term, and according to the 4-hour chart, XAU/USD is neutral. Technical indicators seesaw around their midlines, now heading higher although below their intraday highs. The chart shows that the pair briefly pierced a directionless 20 SMA but currently develops above it. Still, the longer moving averages maintain their bearish slopes far above the current levels.
Support levels: 1,884.20 1,871.50 1,859.90
Resistance levels: 1,903.60 1,915.30 1,922.40
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
Australian Dollar sees gains on hawkish RBA minutes
The AUD/USD climbed by 0.15% to 0.6520 in Tuesday's trading, driven by several factors. The hawkish Reserve Bank of Australia (RBA) Minutes provided support to the Australian Dollar, as did a weaker US Dollar and hopes for Chinese economic stimulus.
EUR/USD looks for higher ground above 1.06
EUR/USD chewed through chart paper between 1.0550 and 1.0600 levels on Tuesday, testing into the low side but staging a recovery to add a thin 0.14% on the day.
Gold remains propped up by geopolitics
Gold retreats slightly from the daily high it touched near $2,640 but holds comfortably above $2,600. Escalating geopolitical tensions on latest developments surrounding the Russia-Ukraine conflict and the pullback seen in US yields help XAU/USD hold its ground.
Why is Bitcoin performing better than Ethereum? ETH lags as BTC smashes new all-time high records
Bitcoin (BTC) has outperformed Ethereum (ETH) in the past two years, setting new highs while the top altcoin struggles to catch up with speed. Several experts exclusively revealed to FXStreet that Ethereum needs global recognition, a stronger narrative and increased on-chain activity for the tide to shift in its favor.
How could Trump’s Treasury Secretary selection influence Bitcoin?
Bitcoin remained upbeat above $91,000 on Tuesday, with Trump’s cabinet appointments in focus and after MicroStrategy purchases being more tokens.
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.