- Gold sees some signs of life amid weaker Treasury yields.
- The DXY rebound could cap the gains in XAU/USD.
- Gold clings onto the 21-DMA support ahead of the critical US CPI.
Gold (XAU/USD) is challenging the bearish commitments near the critical support at $1731, with all eyes on the US CPI for a fresh direction.
That level is the 21-daily moving average (DMA), which has been holding the fort for the past week.
The yellow metal fell nearly $11 on Monday, extending its two days of declines, as the Treasury yields reversed course and edged slightly higher following a good three-year note auction.
Meanwhile, a mixed closed on Wall Street, a positive tone in the Asian markets and a broad comeback in the US dollar keep the gold buyers on the edge.
The recent strong US PPI data has lifted inflation expectations, which seem to be offering support to the traditional hedge against inflation, gold. Markets await the US CPI release for fresh insights on the strength of the economy and the Fed rate hike outlook.
Gold: Technical outlook
With the 14-day Relative Strength Index (RSI) inching higher to probe the midline, the price of gold is looking to extend its bounce from the abovementioned 21-DMA support.
Gold Price Chart: One-day
Monday’s high at $1745 would offer initial resistance, as the bulls eye a sustained move above the bearish 50-DMA at $1756.
If the 21-DMA support is breached, a sell-off towards the April 1 low of $1706 cannot be ruled out.
The next relevant support awaits at the $1700 round figure.
Gold: Additional levels
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
EUR/USD holds steady above 1.0550 on modest USD weakness
EUR/USD struggles to gather recovery momentum but clings to modest daily gains above 1.0550 in the second half of the day on Monday. Although the US Dollar corrects lower following the previous week's rally, the cautious market mood makes it hard for the pair to push higher.
GBP/USD stabilizes above 1.2600 following previous week's drop
GBP/USD defends minor bids above 1.2600 in the American session on Monday, while the negative shift seen in risk sentiment caps the pair's upside. The Bank of England Monetary Policy Hearings and UK inflation data this week could influence Pound Sterling's valuation.
Gold benefits from escalating geopolitical tensions, rises above $2,600
After suffering large losses in the previous week, Gold gathers recovery momentum and trades in positive territory above $2,600 on Monday. In the absence of high-tier data releases, escalating geopolitical tensions help XAU/USD hold its ground.
Bonk holds near record-high as traders cheer hefty token burn
Bonk (BONK) price extends its gains on Monday after surging more than 100% last week and reaching a new all-time high on Sunday. This rally was fueled by the announcement on Friday that BONK would burn 1 trillion tokens by Christmas.
The week ahead: Powell stumps the US stock rally as Bitcoin surges, as we wait Nvidia earnings, UK CPI
The mood music is shifting for the Trump trade. Stocks fell sharply at the end of last week, led by big tech. The S&P 500 was down by more than 2% last week, its weakest performance in 2 months, while the Nasdaq was lower by 3%. The market has now given back half of the post-Trump election win gains.
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.