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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

Key quotes

“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.”