- A combination of factors helps gold reverse an intraday decline to the $ 1,730 region.
- Cautious sentiment and falling US bond yields offer some support for gold.
- A strong rally in USD demand limits any significant rally for the XAU / USD.
The oro It has recovered from an intraday drop to the region of $ 1,731 and has again approached the daily highs during the European session, although it has lacked continuation. The precious metal is listed just below the $ 1,740 level, practically unchanged on the day.
Investors have become cautious after the United States, Canada, the United Kingdom and the EU, in a rare and coordinated move, imposed sanctions on Chinese officials for human rights violations in Xinjiang. This has been evident by weaker trade sentiment around the equity markets, which in turn has offered some support for the safe-haven XAU / USD.
The flight to safety has been reaffirmed by a new downward movement in U.S. Treasury yields, which has further boosted some money flows towards the yellow metal. That said, a strong rally in demand for the US dollar has limited any significant gains for gold prices, denominated in dollars, warranting caution for the bulls.
The dollar has remained supported by the Prospects for a Relatively Quicker US Economic Recovery, reinforced by the approval of a massive stimulus package from the United States. The optimistic economic outlook has been reaffirmed by Fed Chairman Jerome Powell and US Treasury Secretary Janet Yellen prepared to give testimony on Tuesday.
Even from a technical perspective, the XAU / USD, so far has struggled to climb back above the $ 1,740-42 resistance zone. The lack of solid continuation buying suggests that the recent rebound from multi-month lows may be over and supports prospects for a resumption of the recent strong pullback from multi-year highs.
Therefore, any subsequent strength is likely to be viewed as a selling opportunity and risks fading away fairly quickly. This, in turn, should limit the rally near a strong previous support break point, now turned into resistance near the $ 1,760-65 region, which should now act as a key point for short-term investors.
Gold technical levels
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