- A combination of supportive factors drives gold prices higher on the first day of a new week.
- G7 countries’ plan to ban bullion imports from Russia boosts gold price amid dollar weakness.
- Risk appetite prevents bulls from opening aggressive positions and limits profits.
The Prayed it has attracted some buying at lower levels, after covering the weekly bullish gap, and has risen to a fresh daily high during the early part of the European session. The XAU/USD is now trading around the $1,840 zone, with the bulls still waiting for sustained strength above the important 200-day SMA.
the recent and sharp drop in commodity and energy prices appears to have allayed fears about the risk of a further rise in inflationary pressures. Furthermore, some data indicates that growth momentum in the US is beginning to cool. This forced investors to reassess prospects for more aggressive rate hikes by the Federal Reservedragging the US dollar to a one-week low on Monday and benefiting the dollar-denominated price of gold.
Some countries, like The US, UK, Japan and Canada are planning to announce a ban on new gold imports from Russia during the G7 summit. This was considered as another factor that acted as a tailwind for XAU/USD. However, upside remains limited, at least for now, amid a generally positive tone around equity markets, which tends to drive money flows away from the safe-haven XAU/USD.
meanwhile, risk appetite pushed up US Treasury yields and was seen as another factor preventing any significant rise in the underperforming yellow metal. This, in turn, warrants some caution before opening aggressively bullish positions on gold. Market participants now await the US economic calendar, in which Durable Goods Orders and Pending Home Sales will be released later in the American session.
This, coupled with US bond yields and dollar price dynamics, should give gold some lift. Investors will follow the market risk sentiment to take advantage of some short-term opportunities around XAU/USD.
gold technical levels
Source: Fx Street
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