- Gold fell into negative territory during the US session.
- The USD remains resilient despite falling Treasury yields.
- Key technical levels remain intact as XAU / USD struggles to find direction.
The pair XAU/USD it closed the first day of the week in positive territory and continued to rise through the first half of the day on Tuesday. However, after hitting a daily high of $ 1,903, the pair lost traction and fell to $ 1,883 before entering a consolidation phase. At time of writing, gold was down 0.37% on the day at $ 1,892.
Hours earlier, the sharp drop in US Treasury yields allowed gold to maintain its bullish momentum. However, the cautious mood of the market helped the dollar to remain resilient against its rivals on Tuesday and forced the XAU / USD to reverse its direction. At the moment, the benchmark 10-year US Treasury yield is down more than 2% on the day to 1.53%, but the US Dollar Index is holding on to modest gains at 90.12.
US data revealed on Tuesday that the deficit for goods and services narrowed by $ 6.1 billion to $ 68.9 billion in April. Additionally, NFIB’s Business Optimism Index dropped to 99.6 in May from 99.8 in April, and JOLTS job postings hit a new high of 9.3 million in April, compared to analysts’ estimate of 8.3 million. These figures did not provoke a notable reaction in the market.
Meanwhile, the major Wall Street indices, which opened in positive territory, are moving sideways near Monday’s closing levels, reflecting a cautious mood in the market ahead of Consumer Price Index data. (IPC) on Thursday.
Gold technical outlook
Following Tuesday’s fluctuations, gold’s key technical remains remain intact. On the upside, sellers continue to defend $ 1,900 (psychological level). Above that hurdle, the next resistance is at $ 1,916 (June 1 high). Meanwhile, the Relative Strength Index (RSI) indicator on the daily chart is moving sideways near 60, which suggests that the pair is having a difficult time gaining directional momentum.
On the downside, the 20-day SMA, which is currently at $ 1,880, continues to act as dynamic support. A daily close below that level could allow gold to retest the rising trend line from early April at $ 1,870. ahead of the critical 200-day SMA at $ 1,840.
Technical levels
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