- Gold bulls take a breather before resuming momentum to the upside.
- The pullback in Treasury yields and risk appetite sentiment weighs on the USDD and underpins gold prices.
- The technical setup on the 1-hour chart suggests that a further move to the upside could be in the offing.
Gold (XAU / USD) is consolidating the advance near the $ 1,740 level as the bulls take a breather before resuming their move towards the two-week highs of $ 1,756.
The latest bullish move in gold was driven by the pullback in US Treasury yields along the curve, easing overheating fears somewhat and lifting market sentiment. The safe-haven US dollar took a hit, which in turn has provided support for the yellow metal.
At the time of writing, benchmark 10-year US rates are down nearly 2.50% on the day, down from the 1.70% level. Yields hit the highest levels since January 2020 at 1.74% on Thursday.
Meanwhile, the short-term technical setup for gold remains constructive, especially after buyers found acceptance above the critical 50 hourly moving average at $ 1,738.
Therefore, the XAU bulls could find some support on any pullback from higher levels. A breakout of this level could expose the powerful support at $ 1,734, where the 21 and 100 hourly SMAs intersect.
However, with the RSI still firm above the midline, the bullish bias remains intact.
Adding credibility to the optimistic outlook, the confluence of the 21 and 100 SMAs has confirmed a bullish crossover.
The next relevant target on the upside is at $ 1,750, a psychological level, above which the two-week highs could be retested.
The March high of $ 1,760 remains on buyers’ radar.
Gold 1 hour chart
Gold technical levels
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