XAU / USD backs off after Tuesday’s rally and remains around $ 1800

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  • Gold Rally loses moment but manages to return over $ 1800.
  • Treasury bond yields validate Tuesday’s decline.
  • More US data Wednesday: Empire and industrial production.

Gold is retreating on Wednesday after hitting a one-week high of $ 1808.50 on Tuesday. After hitting a low at $ 1798, XAU / USD managed to return above $ 1800 and is trading just above, supported by a weak dollar and low US Treasury yields.

The pullback below $ 1805 detracted from the metal rally, although for now the correction has been moderate. A return above the aforementioned level could give it further momentum, with immediate resistance at $ 1808 and then in the $ 1820 zone, before the key $ 1833 level. Should gold’s pullback extend further below $ 1,795, it would return to the pre-break range on Tuesday, between $ 1,780 and $ 1,800.

The price took a steep rise Tuesday on the back of US inflation data. August that showed figures below expectations. On Wednesday the Empire manufacturing and industrial production data will be released. Thursday will be the turn of retail sales and unemployment benefits.

Support for XAU / USD continues to be in Treasury yields. The 10-year rate is at 1.27%, close to Tuesday’s low; and a long way from that day’s high of 1.35%. A rebound in yields would take strength from the bullish scenario for gold, favoring a correction.

Technical levels

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