- Gold retains its bullish momentum ahead of the American session on Wednesday.
- The 10-year US Treasury yield remains in negative territory.
- The dollar struggles to find demand ahead of US inflation data.
The price of oro (XAU / USD) it struggled to make a decisive move in either direction in the early days of the week, but managed to gain traction ahead of the release of US inflation data on Wednesday. Renewed Dollar Weakness and Falling US Treasury Yields they seem to be helping gold to rise. At the time of writing, gold is up 0.7% on the day trading at $ 1,772.
In the absence of significant releases of fundamental data and developments, the observed positive shift in market sentiment is making it harder for the US dollar to find demand. With US stock index futures rising 0.2% to 0.5%, the US dollar DXY index is down 0.25% on the day at 92.28 to mark widespread dollar weakness.
Meanwhile, the 10-year US Treasury yield, which fell 3.25% on Tuesday, remains in negative territory, providing an additional boost to XAU / USD.
In a preview of the data from the consumer price index CPI“Markets are well aware that price increases are again playing a role in Fed policy, even if the rhetoric is muted,” said FXStreet Senior Analyst Joseph Trevisani. “Credit markets tell the story. As inflation rises, so should Treasury and dollar yields.”
Technical prospects for gold
On the four-hour chart, gold is currently moving above the two-week-old trading range and a daily close above $ 1,770 could open the door to additional gains. However, the RSI indicator on the same chart is approaching 70, suggesting that there could be a technical correction before the next move up.
To the upside, the 200-period SMA acts as the first resistance at 1.775$ in front of 1.787$ (September 22 maximum) and 1.800$ (psychological level).
Initial support is now at 1.770$ (previous resistance), before 1.760$ (50-period SMA) and 1.755$ (SMA of 100 periods).