- Gold is positive for the day but far from the highs.
- Dollar rise pushes XAU/USD down, despite drop in Treasury bond yields.
- US personal income and spending report is coming.
The Prayed trimmed daily gains in the European session and fell to $1,664. Previously the price had climbed to $1674, the highest level in a week.
The decline in the price of the yellow metal occurred due to a strengthening of the dollar in the market. The greenback is rising after two sharp falls, particularly against G10 currencies. Gold’s momentum loss comes despite lower Treasury yields and the same goes for European bond yields.
For now, XAU/USD’s decline should be seen as a correction of the recent rally. The long-term trend is still bearish, but the very short-term trend still shows positive signs. Around $1,655 a key support can be found that, if it gives way, could anticipate further declines. Below will be $1,645, where the 4-hour 20 moving average is, the break of which would increase negative pressures.
Upward, XAU/USD needs to hold above $1660 to keep the possibility of further upside standing. A consolidation above $1,670 would pave the way for more rallies and a test of the $1,680 area. The confirmed break of $1,680 would significantly increase the chances of reaching $1,700.
The focus will continue to be on bonds and equities, which reflect the mood of the market. In addition, US data will be released with the Personal Income and Expenditure report that includes the Personal Consumption Expenditure Price Index, an important measure of inflation. These figures can have a significant impact.
Technical levels
Source: Fx Street
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