Gold Price Analysis: XAU/USD struggles for direction, flat-lined below $1740 level


  • A combination of factors assisted gold to reverse an intraday dip to the $1730 region.
  • The cautious mood, sliding US bond yields extended some support to the commodity.
  • A strong pickup in the USD demand capped any meaningful upside for the XAU/USD.

Gold reversed an intraday dip to the $1731 region and edged back closer to daily tops during the early European session, albeit lacked follow-through. The commodity was last seen trading just below the $1740 level, nearly unchanged for the day.

Investors turned cautious after the US, Canada, UK and EU – in a rare, coordinated move – imposed sanctions on Chinese officials over human rights violations in Xinjiang. This was evident from a weaker trading sentiment around the equity markets, which, in turn, extended some support to the safe-haven XAU/USD.

The flight to safety was reaffirmed by a fresh leg down in the US Treasury bond yields, which further drove some flows towards the non-yielding yellow metal. That said, a strong pickup in the US dollar demand kept a lid on any meaningful gains for the dollar-denominated commodity, warranting caution for bullish traders.

The greenback remained well supported by the prospects for a relatively faster US economic recovery, bolstered by the passage of a massive US stimulus package. The optimistic economic outlook was reaffirmed by Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen's prepared remarks for testimony on Tuesday.

Even from a technical perspective, the XAU/USD, so far, has struggled to move back above the $1740-42 supply zone. The lack of any strong follow-through buying suggests that the recent bounce from multi-month lows might have run its course and supports prospects for the resumption of the recent sharp pullback from multi-year tops.

Hence, any subsequent strength is likely to be seen as a selling opportunity and runs the risk of fizzling out rather quickly. This, in turn, should cap the upside near a previous strong support breakpoint, now turned resistance near the $1760-65 region, which should now act as a key pivotal point for short-term traders.

Technical levels to watch

XAU/USD

Overview
Today last price 1739.44
Today Daily Change 0.33
Today Daily Change % 0.02
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

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


Recommended content

Editors’ Picks

EUR/USD treads water just above 1.0400 post-US data

EUR/USD treads water just above 1.0400 post-US data

Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.

EUR/USD News
GBP/USD remains depressed near 1.2520 on stronger Dollar

GBP/USD remains depressed near 1.2520 on stronger Dollar

Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.

GBP/USD News
Gold keeps the bid bias unchanged near $2,700

Gold keeps the bid bias unchanged near $2,700

Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.

Gold News
Geopolitics back on the radar

Geopolitics back on the radar

Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.

Read more
Eurozone PMI sounds the alarm about growth once more

Eurozone PMI sounds the alarm about growth once more

The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

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