- A softer risk tone, the pullback in US bond yields helped gold gain traction on Tuesday.
- A modest pickup in USD demand kept any additional gains for the commodity limited.
- The setup favors intraday bullish traders, via mixed oscillators that warrant caution.
The oro it maintained its modest intraday gains for the middle of the European session and was last seen near the two-week highs, just above the $ 1,735 level.
A generally softer tone of risk, coupled with falling US Treasury yields, extended some support to the underperforming yellow metal. However, a good recovery in demand for the US dollar prevented the bulls from making aggressive bets and could limit gains on the dollar-denominated commodity.
From a technical perspective, the XAU / USD bulls could now be looking to take advantage of momentum above the 200-period SMA on the 4-hour chart. This is closely followed by the $ 1,744-46 bid zone, which if decisively cleared will be seen as a new trigger for bull traders.
Meanwhile, the technical indicators on the hourly charts have been gaining positive traction, but have yet to confirm a bullish bias on the daily chart. This, in turn, warrants some caution for aggressive bull traders and positioning for any further appreciation moves for the XAU / USD.
Therefore, any subsequent upward movement is more likely to face stiff resistance near a breakout point of previous strong horizontal support, around the $ 1,760-65 region. The mentioned barrier is also the neckline of a bullish double bottom pattern and should act as a key point for traders.
On the other hand, immediate support is pegged at the $ 1,720 level. This is followed by the $ 1,700 level, which if broken will override the constructive setup. XAU / USD could accelerate the decline to challenge multi-month lows around the $ 1,677-76 region.
4 hour chart
Technical levels
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