- XAU / USD bounces after closing in negative territory on Monday.
- The yield on the 10-year US Treasury is declining on Tuesday.
- Additional gains are likely if gold manages to clear the $ 1,775 resistance.
Despite the strong selling pressure surrounding the dollar, the pair XAU / USD It posted losses on Monday as the recovery in US Treasury yields made it difficult for gold to find demand. However, with the benchmark 10-year US Treasury yield shedding nearly 1% on Tuesday, the pair managed to regain its traction and was last seen gaining 0.2% on the day at $ 1,774.70.
Gold technical outlook
Gold is currently trading around the 23.6% Fib retracement of the last uptrend that started Thursday and lasted for three trading days. If XAU / USD manages to close a four-hour candle above that level, it could test $ 1,790 (Monday’s high) before $ 1,800 (psychological level).
However, the sharp U-turn seen at $ 1,790 on Monday suggests that gold could struggle to overcome that hurdle unless the move is fueled by another leg down in US Treasury yields. .
On the downside, initial support is at $ 1,772 (20-period SMA) before $ 1,767 (Fibonacci retracement of 38.2%) and $ 1,760 (50% Fibonacci retracement).
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