Gold price snapped a two-day downtrend on Tuesday and rallied as high as $1785 before reversing sharply to finish the day with moderate gains at $1769. In the view of FXStreet’s Dhwani Mehta, XAU/USD’s bullish potential appears limited amid bear cross and firmer yields.
See – Gold Price Forecast: Further gains for XAU/USD may be limited – HSBC
Bullish potential appears limited in gold amid a bear cross on the daily sticks
“It remains to be seen if the yellow metal manages to extend the recent gains, as the rally in the global yields will likely continue amid hawkish expectations from the key central banks, including the Fed and the BoE.”
“The 14-day Relative Strength Index (RSI) is trading flattish above the midline, backing the renewed upside. However, the bear cross confirmed on the daily sticks on Tuesday warrants caution for gold bulls. The 100-DMA cut the 200-DMA from above flagging a bearish signal.”
“XAU/USD is likely to face resistance once again at the horizontal 50-DMA at $1779. A sustained move above the latter could call for a retest of the 100 and 200-DMAs confluence zone at $1794. A sustained break above the latter could expose the $1800 round number.”
“Only a daily closing below the 21-DMA at $1761 support will negate the recent upbeat tone. If the latter yields in, then the previous week’s support area around $1750-$1745 would be challenged. The multi-week lows of $1722 could be tested should the downside momentum pick up pace.”
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