Gold price stays firmer near $2,030 amid sustained USD weakness

Gold price is extending its four-day rally into Wednesday's Asian trading. News that China lowered interest rates sponsored Gold’s leg-up alongside a drop in US Treasury bond yields. US fiscal woes underpin the Gold price at the expense of the US Dollar. Fed Minutes awaited. 

 

The daily chart for the XAU/USD pair shows an increased bullish potential. The bright metal is trading above its 20 Simple Moving Average (SMA) for the first time in over a week. At the same time, the longer moving averages gain upward traction far below the current level, with the 100 SMA providing dynamic support at around $1,995.35. Finally, the Momentum indicator remains directionless, just below its 100 level, but the Relative Strength Index (RSI) indicator maintains its bullish slope at around 51, skewing the risk to the upside.

In the near term, and according to the 4-hour chart, XAU/USD lost momentum but holds on to gains, limiting the risk of a steeper slide. The 20 SMA heads firmly north, far below the current level, reflecting the ongoing momentum,  while the longer moving averages remain directionless. XAU/USD hovers around a flat 200 SMA. Technical indicators, in the meantime, eased from near overbought readings, reflecting the ongoing retracement rather than suggesting an upcoming leg south.

Support levels: 2,011.40 1,995.35 1,976.50

Resistance levels: 2,032.50 2,045.20 2,064.90 

 

 

Fundamental Overview