- Falling US bond yields undermined the USD and helped gold regain traction on Thursday.
- Acceptance above the 200-period SMA on the 4-hour chart supports the prospects for additional gains.
- A sustained move past the $ 1,760-65 hurdle will confirm a double bottom bullish breakout.
The oro it held its intraday gains near the three-week highs and is now looking to capitalize on momentum beyond the $ 1,745-46 resistance zone.
A further downward leg in US Treasury yields undermined the US dollar, which, in turn, extended some support to dollar-denominated commodities. That said, underlying bullish sentiment kept any further gains for the XAU / USD safe haven capped. Investors also seemed reluctant, preferring to wait for Fed Chairman Jerome Powell’s speech before making aggressive bets on the yellow metal that won’t budge.
From a technical perspective, acceptance above the 200-period SMA on the 4-hour chart supports prospects for an extension of the recent bounce from multi-month lows, around the $ 1,677-76 region. , which constituted the formation of a bullish double bottom. The constructive outlook is reinforced by the fact that the oscillators on the hourly charts have been gaining positive traction and have simply moved into bullish territory on the daily chart.
Therefore, a subsequent breakout point towards strong previous support, around the $ 1,760-65 region, seems like a clear possibility. Some subsequent purchases will validate the breakout of the double bottom and set the stage for additional gains. The XAU / USD could accelerate momentum towards an intermediate hurdle near the $ 1,782 region before eventually heading back to regain the $ 1,800 round mark.
On the other hand, the $ 1,735 level and overnight lows around the $ 1,730 region now appear to protect the immediate drop. This is closely followed by the horizontal support at $ 1,720. Failure to defend the mentioned support levels will negate any positive bias and make the XAU / USD vulnerable to challenge the $ 1,700 level. The downward trajectory could extend further into the challenge of the $ 1,677-76 support zone.
4 hour chart
Technical levels
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