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  • Although the US dollar remained resilient throughout the week, gold prices remained stable.
  • The price of gold bars could rise if US stocks decline further.
  • The Golden Cross is about to be formed on XAU/USD.

The gold price remained solid at the end of the week, with a pause in strengthening the US dollar and government bond sales providing additional support for the upside. Stocks plunged on Wall Street overnight as small-cap stocks fell.

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Traders returned to bonds overnight. During the overnight period, 10-year bond rates fell below the closely watched 1.60% level, and the dollar index fell by 0.11%.

As a result of the release of the US CPI data last week, the yellow metal has gained significantly in strength, raising concerns about inflation in the economy. As the US dollar and US Treasury bond yields rose, the metal was also moving, two factors that tend to weigh it down. The recent price changes may be due to the popularity of gold bars as a hedge against inflation and volatility.

In the absence of significant events on the calendar until the end of the week, gold’s current calculations may hold true. As a result, further losses on the stock market will fuel volatility and push traders toward safer government bonds.

It is encouraging to see this market behavior and reduce the risk of recent gains being undermined by a stronger dollar.

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Gold price technical analysis: Bullish crossover points at further gains

gold price chart

Despite a sharp rise last week, gold prices have remained near the $1,865 area in recent sessions. The recent upside has pushed the 50-day simple moving average (SMA) up, placing it on a collision course with the longer-term 200-day SMA. The crossover of these two major moving averages completes the formation of the Golden Cross, resulting in further price gains because of the bullish nature of the signal.

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