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Gold (XAU/USD) builds on Friday’s 1.20% rally and trades near the highest levels in two weeks as the dollar remains less preferred. A close above the 21-DMA at $1970 is needed for additional gains, FXStreet’s Dhwani Mehta reports.

Key quotes

“The path of least resistance appears to the upside for the yellow metal, as the US dollar remains less favored against its major competitors, in the wake of the record-breaking rally in the US stocks that contributes to the upbeat market mood. Further, uncertainty about the US fiscal stimulus and rising election risks continue to bode well for gold.”

“Despite the upbeat momentum, the price is struggling to make a decisive move past the horizontal 21-daily Simple Moving Average (DMA), currently at $1970. A daily closing above that level is needed to extend the bullish break towards the July high of $1985. Acceptance above the July high will call for a test of the $2000 mark.”

“On the flip side, should the price deliver a daily closing below $1950, the abovementioned resistance now turned support, the near-term bullish bias could likely weaken. The next cushion is seen at Friday’s low of $1923.”

 

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