- Gold validates an important bounce on Monday.
- From the floor, XAU/USD rises more than $40 and tests resistance at $1,830.
- The dollar corrects sharply lower, stocks rise significantly.
The Prayed is trading in positive territory on Tuesday, with moderate gains, and confirms a strong bounce from Monday, when it rose more than $40 from the low. XAU/USD reached as high as $1830.40, the highest level since Thursday.
For hours, the price of an ounce has been moving in ranges between $1,823 and $1,830. The very short term bias is bullish and the resistance at $1830 is being tested. In case of breaking above the next resistances are at $1841 and then the $1850 area.
The bullish tone is expected to hold unless XAU/USD pulls back and confirms below $1820, where the 20-day moving average is passing through on the four-hour chart, and which is also a horizontal support. Below the next support is seen at $1805.
The rises in gold are behind a general correction in the markets. The dollar is falling on all fronts. DXY Posts Third Consecutive Daily Drop and Worst Day in Weeks; is trading at 103.50, far from Friday’s 105.00 peak.
The treasury bond yields They remain without major changes with respect to the previous days. The 10-year rate is 2.91% and the 30-year rate is 3.11%. Bonds have not rallied like other assets, which may be limiting the yellow metal’s advance. Silver meanwhile is trading at fresh daily highs at $21.80, the highest level in almost a week.
Looking ahead to the next few hours, it will be key if the dollar’s decline continues and the better tone in the markets, which could support gold, especially if yields do not rise. Regarding data, the US retail sales report for April will be published at 12:30 GMT and then industrial production data for April. In addition, various Federal Reserve officials will speak, including Jerome Powell, at a Wall Street Journal event on the future of the economy.
Technical levels
Source: Fx Street
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