Gold staged a solid bounce from multi-month lows and rallied over 2% on Tuesday. XAU/USD remains at the mercy of US bond yields while US Consumer Price Index figures, which are set to show a minor increase in price pressures, are eyed on Wednesday, FXStreet’s Haresh Menghani briefs.
More – Gold Price Analysis: Weaker USD and range-bound real yields to underpin XAU/USD – Standard Chartered
“Given that gold is considered as a hedge against inflation, Wednesday’s release of the US CPI report will now play a key role in influencing the near-term trajectory. In the meantime, the broader market risk sentiment, the USD price dynamics and the US bond yields will be looked upon for some meaningful trading opportunities.”
“Any subsequent positive move might still be seen as a selling opportunity near the $1740 region. This, in turn, should cap the upside for the commodity near the $1760-65 strong horizontal support breakpoint. That said, a sustained move beyond will suggests that the metal has bottomed out and set the stage for some meaningful recovery in the near-term.”
“The $1700 mark now seems to protect the immediate downside. This is followed by support near the $1685-83 region, which if broken will be seen as a fresh trigger for bearish traders. XAU/USD might then accelerate the fall towards June 2020 swing lows, around the $1670 level before eventually dropping to the next relevant support near the $1650 area.”