Gold Price Analysis: XAU/USD jumps to three-day tops, around $1720 level

Gold built on its goodish intraday positive move and climbed to three-day tops, around the $1720 region during the early North American session.

A sharp pullback in the US Treasury bond yields turned out to be a key factor extending support to the non-yielding yellow metal. Retreating US bond yields prompted some US dollar profit-taking, which, in turn, provided an additional boost to the dollar-denominated commodity.

From a technical perspective, oversold RSI on the daily chart remained supportive of the short-covering bounce. Moreover, oscillators on hourly charts have been gaining some positive traction and support prospects for further recovery from nine-month lows touched on Monday.

Meanwhile, technical indicators on the daily chart are still holding deep in the bearish territory. This, in turn, warrants some caution for bullish traders amid the prevalent risk-on mood, which tends to undermine demand for traditional safe-haven assets, including gold.

Hence, any subsequent positive move beyond the $1722-23 region might still be seen as an opportunity to initiate fresh bearish positions. This, in turn, should keep a lid on any further gains for the XAU/USD around the $1739-40 strong horizontal zone.

On the flip side, the $1700 mark now seems to protect the immediate downside. Weakness back below the mentioned handle will reaffirm the bearish outlook and turn the XAU/USD vulnerable to resume its well-established bearish trend witnessed over the past two months or so.

XAU/USD 4-hourly chart

Technical levels to watch