Spot gold continues to trade within the parameters of $ 1,725 - $ 1,745, with the 21-day moving average acting as a magnet.
Last Thursday’s lows at just under $ 1,720 and highs at $ 1,755 remain the key areas of support and resistance.
Still a boring week for the spot gold markets (XAU / USD); The precious metal continues to trade within the parameters of $ 1,725 - $ 1,745, with the 21-day moving average, currently around $ 1,732, acting as a magnet for price action. On the day, gold was up a modest 0.4% or around $ 8. Last Thursday’s lows modestly below $ 1,720 and highs at $ 1,755 remain the key areas of support and resistance.
Performance of the day
As long-term US government bond yields have declined substantially from last week’s highs, the bond market was down on Wednesday; the 10-year yield is flat on the day at just under 1.65%, more than 10 basis points below last week’s highs. Although the decline in yields this week has been supportive for gold, the advance of the dollar has been the counterweight to keep gold prices practically flat during the week; DXY hit new yearly highs above 92.50 on Wednesday, after starting the week below 92.00.
In recent trade, however, the US dollar has moved sideways; The DXY appears to have encountered resistance at its 200-day moving average, while a combination of very strong March Eurozone and UK PMI surveys and a weak February US durable goods orders report (the latest in a series of US hard data releases in February) offers some support to pairs like EUR / USD and GBP / USD; what’s bad for the dollar is generally good for gold, so as long as DXY continues to struggle as it approaches its 200 DMA and rates continue to head lower, this should be good for gold.
However, some important events later in the week are worth noting, as they could inject new direction into the bond and gold markets; US President Joe Biden will give his first press conference since taking office at 17:15 GMT on Thursday. You will be questioned on a variety of topics, but the market’s main concern is the upcoming fiscal stimulus package. Reports in recent weeks have suggested that the next infrastructure-focused spending bill could be priced at between $ 1.5 trillion and $ 4 trillion. Most political commentators seem to expect something at the $ 3 trillion ballpark.
Interestingly, a Fox Business News reporter just tweeted that a growing number of “big investors” think the Fed will soon launch a yield curve control policy to keep interest rates in check amid all the next issue. of US government debt Such a development could be very optimistic for gold, since 1) it would further increase the money supply and degrade the dollar, 2) it would push an eventual monetary adjustment towards the future and 3) it would probably be inflationary. , given the combination of fiscal and monetary stimulus.
Technical levels
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