XAU/USD remains under the $1,900 level into a fresh week this Monday. According to FXStreet’s Dhwani Mehta, gold’s path of least resistance appears to the downside in the near term.
XAU/USD’s upside appears capped below $1900
“Gold price extended last week’s dismal performance into a fresh week this Monday, tempered by US Treasury Secretary Janet Yellen’s comments over the weekend, which revived tapering expectations and lifted the yields.”
“Gold price feels the heat of the tussle between the White House and Republicans over the $1.7 trillion infrastructure spending plan. Attention now turns towards the US CPI report, in order to gauge the Fed’s next monetary policy path.”
“Gold’s four-hour chart shows that the price is challenging the upward-sloping 100-simple moving average (SMA) support at $1884, having faced rejection at the 50-SMA of $1896 on a couple of occasions. Acceptance below that latter could expose the $1870 static support, below which the two-week lows could be retested.”
“A sustained break above the 50-SMA resistance is likely to threaten the falling trendline hurdle at $1900.”
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