- XAU/USD’s rebound from day lows at $1,705 extends to $1,730.
- Gold futures trim previous losses with the USD on retreat as market sentiment improves
- Longer-term, the precious metal remains consolidating below May’s high at $1,763
The XAU/USD is going through a sharp recovery from day lows at $1,705 taking back about $25, to remain little changed on the daily chart. The precious metal has been boosted by USD weakness, as market sentiment brightener on Monday’s afternoon US session.
The USD drops across the board as risk sentiment improves
Stock markets have turned around during the US trading session, after having opened the week with significant declines. The increase of COVID-19 cases in China and in several US states have triggered concerns that a second pandemic wave would cripple the incipient economic recovery.
Market fears, however, have eased throughout the day and Wall Street has staged a spectacular rebound from 2,75% in red to positive 0,75%. This has boosted market sentiment, weighing on safe the US dollar that has dropped to session highs against its main peers. XAU/USD, which had lost about 1.7% during the Asian and European sessions, to hit lows at $1,705, has jumped back to $1,728 so far.
Gold prices consolidate above $1,700
The daily chart shows the XAU/USD consolidating above $1,700, with the 50-day SMA offering support. Below here, next potential targets would be $1,660 (June 5 low) and $1,640 (March 25 high). On the upside, above $1,730, the pair might find resistance at $1,750 (June 11 high) before May’s peak at $1,763.
XAU/USD key levels to watch
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