- Gold fails to extend gains despite dollar weakness.
- Wall Street continues to recover and Treasury yields fall.
- Favorable context for gold, which appears limited.
The Prayed is rising moderately on Friday despite the positive context. XUA/USD rallied to $1,862, a two-day high, but then dropped towards the $1,850 area, showing difficulties in extending gains.
The market outlook looks positive for gold. The dollar is falling on all fronts, particularly against commodity and emerging market currencies. Adding to the dollar’s weakness is the fact that Wall Street stocks are rising again, taking weekly earnings above 4.5%. It’s the first rise in eight weeks.
The good weather and the weakness of the dollar also add to the stability in Treasury bond yields. Even the 10-year rate fell modestly on Friday to 2.72%, not buoyed by higher risk appetite.
The context is highly positive for gold, which is not reacting for these hours and is moving away from the daily maximum. In weekly terms, the rise in the metal is marginal. Although it is still far from the May floor ($1,786), the recovery has not been able to gain strength.
On the downside the first support is still at $1850 and below it comes $1840, which, if given way, would intensify the negative tone, exposing the $1830 area. On the upside, a confirmation above $1,860 could lead to a test of the $1,870 area, a critical level, the break of which would open the way to $1,890, a path that is not without significant setbacks.
Technical levels
Source: Fx Street
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