Gold to negate bullish bias below $1960

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Gold (XAU/USD) is currently testing the $1973/72 support which would open the door toward $1966. Further down, a break below $1960 would dissipate the bullish bias. On the fundamental side, the yellow metal finds support from the US 10-year real or inflation-adjusted yield which hits record low of -1%, FXStreet’s Dhwani Mehta briefs.

Key quotes

“The negative US 10-year real yields, which wallow near record lows of -1%, are indicative of dour macro outlook, thus, underpinning the safe-haven bids for gold. Fresh US-China concerns over the Hong Kong and Tik-Tok issue could likely benefit the precious metal going forward. Next of relevance for traders remains the US Factory Orders data and ongoing US stimulus negotiations.”

“Gold is teasing a descending triangle breakout near $1976 levels, with the Relative Strength Index (RSI) still holding up above the midline in the bullish territory.”

“A technical breakout above the $1978 level could open doors for a retest of the record highs en route the $2000 barrier.”

“The immediate downside sees powerful support at $1973/72, the confluence of the 21 and 50-hourly Simple Moving Averages (HMA). The next support awaits at $1966, the horizontal 100-HMA, which will test the bears’ commitment. A break below the horizontal trendline support at $1960 will negate the near-term bullish bias, opening floors for further correction.”

 

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