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Gold is fighting around $1,700, benefiting from stimulus funds and shrugging off the increase in yields. According to FXStreet’s Haresh Menghani, the uptick might still be seen as an opportunity for XAU/USD bears.

Key quotes

“The passage of US President Joe Biden’s $1.9 trillion pandemic aid package, along with reports of attacks on Saudi Arabian oil production facilities extended some support to the safe-haven XAU/USD.”

“In the absence of any major market-moving economic releases from the US, the broader market risk sentiment will play a key role in driving the XAU/USD. Apart from this, the US bond yields will influence the USD price dynamics and produce some meaningful trading opportunities.”

“Any further recovery towards the $1722-23 region would still be seen as a selling opportunity. This, in turn, should cap the upside near the $1740 heavy supply zone. That said, a sustained move beyond has the potential to push the metal back towards an important $1760-65 strong support breakpoint, now turned resistance.”

“The trend-channel support, around the $1690-88 region, might continue to protect the immediate downside. A sustained breakthrough will be seen as a fresh trigger for bearish trades and turn the commodity vulnerable to accelerate the fall towards the $1670 horizontal support. Some follow-through selling should pave the way for a further near-term depreciating move towards the next major support near the $1620-15 region.”