Gold Price Analysis: XAU/USD chopping either side of its 21DMA in mid-$1730s


  • Gold prices have recently slipped back to this week’s lows around $1730, but continue to trade well within recent ranges.
  • The precious metal is currently caught between the conflicting forces of a strengthening dollar and lower US bond yields.

Spot gold (XAU/USD) prices have been choppy and recently fell back towards this week’s lows around $1730, with prices having been buffeted by the conflicting forces of falling US bond yields against a strengthening US dollar. Spot prices thus continue to trade well within recent ranges; to the upside, last week’s post-FOMC highs at just under $1756 is the key area of resistance to watch, whilst last week’s low at around $1720 is the main area of support to take note of. Until the US dollar and US bond yields can start moving in sync with each other again, god might well continue to chop either side of its 21-day moving average at $1736.50.

Driving the day

As noted, gold is caught between the conflicting forces of a continued drop in US government bond yields (the 10-year yield is now close to 1.65%, a near 10bps pull-back from last week’s highs) and a strengthening US dollar (the Dollar Index or DXY hit fresh two week highs on Tuesday and is comfortably back above the 92.00 level again). The reason for the drop in US government bond yields is not abundantly clear; 1) having been relentlessly hammered in recent weeks, investors might be being tempted back into investing in US bonds with yields now at more attractive levels and 2) with markets in a somewhat defensive mood (global equities, risk-sensitive commodities and currencies are mostly lower), there could be an element of safe-haven demand for US debt.

That latter point appears to be the reason why USD and JPY (safe-haven currencies) are doing the best in the G10 on the day. In fairness, a good part of USD’s strength is also coming from exogenous factors; i.e. extreme weakness being seen in NZD (which is also dragging AUD and other risk-sensitive currencies lower) after the New Zealand government has seemingly eased pressure on the RBNZ to halt the advance in house prices with the unveiling of its own NZD 3.8B housing fund.

In terms of recent market developments, nothing has really had too much impact on the price action, but a few stories are worth noting; the Philly Fed non-manufacturing survey for March was the latest in a string of very strong regional Fed surveys to point to continued strength in the US economy – investors will look for confirmation of this in Wednesday’s preliminary US Markit PMI survey (for March), and this could help re-ignite some optimism about the US recovery (which could push yields and USD higher again at the expense of gold). Meanwhile, Fed Member Robert Kaplan was on the wires earlier talking about the Fed hiking rates in 2022 (much earlier than current FOMC guidance for no hikes through 2023) – clearly, Kaplan is amongst the more hawkish Fed members, but will not be able to vote again until 2023, so will not actually be able to vote for a hike next year, even if he supports one.

Rest of the session

Looking ahead for the rest of the session, Fed Chair Jerome Powell is about to start his first of two days of testimony before Congress. His pre-released remarks contained no new information on the Fed’s view of the economy or policy guidance compared to what was in last week’s monetary policy statement, but markets will be listening to the Q&A section of the testimony. Other Fed members will also be speaking including Raphael Bostic, Thomas Barkin, Lael Brainard and John Williams, all of whose remarks will also be worth watching to see if they deviate from the usual Fed script as was the case just now with Kaplan. Any unexpected hawkish vibes could be gold negative.

XAU/Usd

Overview
Today last price 1731.14
Today Daily Change -7.97
Today Daily Change % -0.46
Today daily open 1739.11
 
Trends
Daily SMA20 1733.53
Daily SMA50 1791.87
Daily SMA100 1829.9
Daily SMA200 1860.61
 
Levels
Previous Daily High 1747.12
Previous Daily Low 1727.42
Previous Weekly High 1755.59
Previous Weekly Low 1719.3
Previous Monthly High 1871.9
Previous Monthly Low 1717.24
Daily Fibonacci 38.2% 1734.95
Daily Fibonacci 61.8% 1739.59
Daily Pivot Point S1 1728.65
Daily Pivot Point S2 1718.18
Daily Pivot Point S3 1708.95
Daily Pivot Point R1 1748.35
Daily Pivot Point R2 1757.58
Daily Pivot Point R3 1768.05

 

 

Share: Feed news

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended content

Editors’ Picks

EUR/USD gathers fresh upside traction and approaches 1.0580

EUR/USD gathers fresh upside traction and approaches 1.0580

Following an early dip to a new 2024 low at 1.0495, EUR/USD manages to regain some balance and retests the area of daily peaks near 1.0580 as the US Dollar's initial uptick seems to have run out of steam.

EUR/USD News
GBP/USD reclaims the 1.2700 barrier and above

GBP/USD reclaims the 1.2700 barrier and above

In line with the rest of its risk-related peers, GBP/USD leaves behind the initial drop to multi-month lows near 1.2630 and attempts a move beyond 1.2700 the figure amidst renewed weakness in the Greenback.

GBP/USD News
Gold trims early losses hovers around $2,575

Gold trims early losses hovers around $2,575

The loss of momentum in the US Dollar and the retracement in US yields across the curve allow Gold prices to pick up some upside traction and revisit the $2,570 zone per ounce troy, trimming part of their early losses.

Gold News
Missing crypto influencer Kevin Mirshahi found dead in Montreal Park

Missing crypto influencer Kevin Mirshahi found dead in Montreal Park

Authorities report that the remains of Kevin Mirshahi, a prominent crypto influencer who was abducted in June, have been found in a Montreal park. Local police informed “The Gazette” that a passerby found the grim discovery on October 30 in Île-de-la-Visitation Park. 

Read more
Trump vs CPI

Trump vs CPI

US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis. 

Read more
Best Forex Brokers with Low Spreads

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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures