- The XAU / USD lost its traction after advancing to multi-month highs.
- Short-term support appears to have formed slightly below $ 1,770.
- Gold continues to react to fluctuations in US Treasury yields.
The pair XAU / USD It managed to take advantage of last week’s gains and hit its highest level since late February at $ 1,790 on Monday. However, the pair was unable to preserve its bullish momentum in the second half of the day and reversed its direction. At time of writing, the XAU / USD was down 0.13% on the day at $ 1,774.
In the absence of important fundamentals, the performance of US Treasury yields continues to affect the valuation of gold. The benchmark 10-year US Treasury yield, which spent the first half of the day in negative territory, was last seen up nearly 1% on the day.
Gold technical outlook
On the four-hour chart, the 38.2% Fibonacci retracement of the rally that started last week on Thursday and ended earlier in the day on Monday appears to have formed strong support at $ 1,767. Meanwhile, the Relative Strength Index (RSI) indicator on the same chart continues above 50, suggesting that the pair is making a technical correction. Below $ 1,767, the 20-period SMA lines up as the next support at $ 1,764 before $ 1,760 (50% Fibonacci retracement).
On the other hand, the pair could target $ 1,790, once again, if it closes a four-hour candle above $ 1,775 (Fibonacci retracement of 23.6%). Finally, $ 1,800 (psychological level) could be seen as the next upside target if the bulls regain control of the price.
Technical levels
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