- Gold manages to gain some positive traction on Friday and recovers the losses of the previous day.
- The pullback in US bond yields keeps USD bulls on the defensive and offers some support for dollar-denominated gold prices.
- The bearish technical setup warrants caution before positioning for any significant bullish movement.
The oro has moved higher and reached new daily highs, around the region of $ 1,745, at the start of the European session on Friday. At the time of writing, gold prices are consolidating near this region, staying within a narrow range above $ 1,740.
after one initial drop just below the $ 1,730 level, the precious metal has managed to regain some positive traction and has recovered from the modest losses of the previous day. The Prevailing cautious sentiment in stock markets has been seen as one of the key factors that has offered some support to the XAU / USDD. safe haven.
The previous day’s sell-off in the US fixed income market. and the Falling crude oil prices took their toll on global risk sentiment. This, in turn, has forced investors to take refuge in traditional safe-haven assets, such as gold. Apart from this, a moderate demand for the US dollar has further benefited the prices of gold, denominated in dollars.
USD bulls have stayed on the sidelines amid a modest pullback in US Treasury yields., which has provided an additional boost to the non-performing yellow metal. That said, the optimistic outlook for the US economy could continue to prop up the dollar and limit any significant rally for the XAU / USD.
The Fed joined the narrative of a relatively faster US economic recovery and predicted a V-shaped recovery this year. Furthermore, monetary policy makers did not show any discomfort at the recent rise in the cost of long-term borrowing. This should act as a tailwind for US bond yields and continue to offer some support to the USD.
Even from a technical perspective, repeated failed attempts near the breakout point of the horizontal support at $ 1,760-65, now converted to resistance, warrant caution before positioning for any further bullish movement. Therefore, any subsequent positive movement could still be seen as a selling opportunity and risks fading away fairly quickly.
Gold technical levels
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