- Gold achieves strong continuation traction for the third day in a row on Tuesday.
- Falling US bond yields weigh on the USD and offer some support for the precious metal.
- The underlying bullish sentiment could limit any uncontrolled rally in XAU / USD.
The oro maintains its firm tone during the European session on Tuesday, trading around the $ 1,844-45 region, just below one-week highs established earlier this Tuesday.
The precious metal has built on last week’s recovery move, from the $ 1,785 area near two-month lows, and has continued to gain positive traction for the third day in a row. The strong upward movement is due to the emergence of some strong selling around the US dollar, which in turn has supported the prices of the precious metal, denominated in dollars.
USD bulls have become cautious amid the Doubts about a relatively quicker economic recovery following the release of a US jobs report. pretty unimpressive on Friday. This, coupled with a modest pullback in Treasury yields, has further hit the USD and provided an additional boost to the yellow metal.
Meanwhile, progress on coronavirus vaccines and a budget resolution to accelerate the $ 1.9 trillion stimulus package proposed by the President of the United States, Joe Biden, has been driving the feeling. In fact, Democratic lawmakers published the first draft of the legislation that would send stimulus payments of $ 1,400 to Americans who earn up to $ 75,000 per year.
The underlying bullish sentiment in financial markets appears to be the only factor that has prevented the bulls from opening new positions and has mimicked any further gains for the XAU / USD. safe haven. Therefore, any subsequent positive movement is likely to face strong resistance and remain capped near the 100-day SMA, currently around the $ 1,870 region.
In the absence of major economic releases from the US, US bond yields and USD price dynamics will play a key role in influencing the XAU / USD. Investors could follow the signs of the broader market risk sentiment to seize some short-term opportunities.
Technical levels of gold
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