Gold (XAU/USD) staged a solid $90 rebound from its brutal sell-off to three-week lows of $1863.20 on Wednesday. The XAU bulls, however, faced stiff resistance near $1950 levels and settled the day around $1936. Overall, dollar weakness keeps the XAU bulls hopeful, with the reversal to be confirmed only above $1960, FXStreet’s Dhwani Mehta briefs.
“The yellow metal could continue to draw support from additional US stimulus expectations and Fed policymakers’ concerns over the economic recovery. Additionally, the sharp retreat in the US Treasury yields could also bode well for the yieldless gold. Traders await the US jobless claims data, with a likely drop in the claims seen boosting the US stocks at the expense of the greenback. Therefore, the metal could keep its recovery mode intact from three-week lows going forward.”
“Gold is struggling to hold onto the 38.2% Fib at $1934 while the 50% Fib lies at $1960. Only a convincing break above the latter will confirm a bullish reversal from three-week lows, opening doors for a test of the $2000 mark.”
“While the $1907 NY low could guard the downside attempts, a break below which the critical support at $1863 will get exposed again. That level is the potential rising channel trendline support.”