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Gold (XAU/USD) settled higher around $1840 on Tuesday, as the US dollar remained on the back foot amid prospects of additional stimulus. The yellow metal has recaptured the 200-daily moving average (DMA) at $1846 on Biden’s inauguration day and daily closing above this critical hurdle is needed to negate the near-term downside bias, FXStreet’s Dhwani Mehta reports.

Key quotes

“On Wednesday, Joe Biden will take the Presidential office and his inaugural speech will be closely eyed for fresh hints on the fiscal stimulus and the next direction in gold. In the meantime, the yellow metal will continue to cheer the calls for more fiscal spending under the Biden administration and growing covid cases in the US. However, the risk-on rally in global stocks could likely cap the upside in the metal.”

“Daily closing above the critical hurdle of the 200-DMA at $1846 is needed to negate the near-term downside bias. Acceptance above the 200-DMA barrier could expose a powerful 50-DMA hurdle at $1860. Further up, the 21-DMA at $1876 will be on the bulls’ radar.”

“A failure to resist above the 200-DMA could revoke the recovery momentum, calling for a retest of the multi-week lows of $1803. A break below which the December low at $1775 could be put to test.”