- Gold drops to $1,890 and then bounces back over $20.
- Volatility will remain high amid news from Ukraine and sharp moves in the Treasury market.
- Bearish bias prevails for XUA/USD, further losses seen on consolidation below $1,900.
The XAU gold is having another volatile session on Tuesday. The price fell sharply to $1,890 after positive reports about the talk between Ukraine and Russian authorities. It then rallied strongly, rising back above $1,910.
XAU/USD hovers around $1,912 as Wall Street stocks maintain daily gains. The yellow metal was supported by a weaker US dollar and lower US yields. DXY is having its worst day since March 10, down 0.90%; currently trading at 98.25 after finding support above 98.00.
The Treasury market is also making sharp moves. The US 10-year yield previously peaked at 2.53% and then fell to a low of 2.38%. At the time of writing, it is hovering around 2.43%. The decline in yields came amid an improvement in market sentiment.
XAU/USD above $1,910
While US yields continue to correct lower, gold could find buyers after declines. If yields rise again, gold is likely to come under pressure. A consolidation below $1,900 (or a daily close below $1,910) would likely trigger further losses. The next strong support is located at $1,885 (55-day SMA), followed by $1,875 and $1,850.
On the upside, the daily high of $1,930 is the first relevant resistance, followed by the 20-day simple moving average at $1,955. A daily close above $1,960 would negate the current negative bias.
Technical levels
Source: Fx Street
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