Gold (XAU/USD) hits four-day lows at $1756 and risks a drop below $1750 amid bearish technical setup, FXStreet’s Dhwani Mehta reports.
See – Gold Price Analysis: Dovish Fed to continue to support XAU/USD – DBS Bank
“Should the sell-off in the Treasury yields accelerate, it could drag global stocks lower while reviving the haven demand for the greenback. Such a move could limit the bounce in the metal, paving the way for the next leg lower.”
“The US House vote on President Joe Biden’s $1.9 trillion stimulus package later on Friday at 14:00 GMT will be closely followed for the next direction in gold. In the meantime, the Treasury yields price-action could likely be the key driver for the bright metal.”
“The recent sell-off charted out a bear flag formation which got validated on the break below the rising trendline support at $1768. The pattern confirmation exposes the end-July lows of $1757, below which the measured target at $1732 could be tested.”
“A sustained move above the rising trendline resistance at $1777 could add credence to the recovery momentum. Although the bearish 21-HMA at $1780 is likely to be a tough nut to crack for the XAU buyers.”