- Gold remains under intense selling pressure for the second day in a row on Friday.
- The previous day’s rally in US bond yields benefits the USD and puts pressure on gold prices.
- The underlying bullish sentiment further affects the precious metal’s safe-haven status.
The oro moves lower during the European session on Friday, falling to four-day lows around the $ 1,812 region.
The precious metal has extended this week’s rejection slide, from the very important 200-day SMA, and has seen strong selling for the second day in a row on Friday. The US bond market has continued reacting to prospects for approval of the $ 1.9 trillion coronavirus stimulus package of US President Joe Biden. This has been evident by a positive rally in US Treasury yields on Thursday, which in turn has pushed monetary flows away from the yellow metal.
Meanwhile, a modest pickup in demand for the US dollar it has been considered as another factor that exerts additional downward pressure on gold prices, denominated in dollars. Apart of this, the underlying bullish sentiment in financial markets has weighed further on the demand for the safe haven XAU / USD. Progress on vaccines for COVID-19, coupled with hopes for a massive US fiscal spending plan, has fueled the hopes for a strong global economic recovery and has increased investor confidence.
From a technical perspective, sustained weakness below the $ 1,826-25 region may already have shifted the short-term bias in favor of bears. Some subsequent selling below the $ 1,818 level will add credibility to the negative outlook and make the XAU / USD vulnerable to retest the $ 1,800 level. The downward movement could extend further towards two-month lows, around the $ 1,785 region touched on February 4 and the November 2020 lows near the $ 1,764 zone.
In the US economic calendar on Friday, the publication of the consumer sentiment index from the University of Michigan for February stands out and could influence the price dynamics of the USD. Investors could follow the signs of US bond yields and general market risk sentiment to seize some short-term opportunities on the last day of the week.
Technical levels of gold
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