- Gold advanced above $ 1,760 following Monday’s swing action.
- The yield on 10-year US Treasuries fell more than 1% on Tuesday.
- XAU / USD must break out of the $ 1,750-70 range to determine the next direction.
The pair XAU/USD it extended its sideways move above $ 1,750 during the Asian session on Tuesday, but managed to gain bullish momentum in European trading hours. However, after climbing to a daily high of $ 1,765, gold lost its traction and erased its daily gains. At time of writing, the pair is practically unchanged on the day at $ 1,754.
Following the three-day weekend, the US bond markets were back in action on Tuesday and the 2% drop seen in the 10-year US Treasury yield helped the XAU. / USD to turn north. Although the 10-year yield managed to pull away from daily lows, it is still down 1.5% on the day while holding above the key 1.6% level.
Meanwhile, the US Dollar Index is trading at its highest level in more than a year at 94.51, preventing the XAU / USD from making a convincing recovery.
The only US data on Tuesday showed that the NFIB Business Optimism Index fell to 99.1 in September from 100.1 in August. Later in the session, the JOLTS job vacancies data for August will be analyzed for fresh momentum.
Gold technical outlook
Despite the recent drop, the XAU / USD pair continues to trade within the two-week-old $ 1,750-70 range. Only a daily close outside that channel could trigger a decisive move.
Meanwhile, the Relative Strength Index indicator on the four-hour chart continues to fluctuate between 40 and 60, confirming the view that XAU / USD is having a hard time finding direction.
With a breakout below $ 1,750, gold could target $ 1,735 (static level) as the next downside target before $ 1,725 ​​(static level). On the other hand, the 200-period SMA forms significant resistance at $ 1,780.
Additional technical levels
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