Gold price fell to a four-month low at the beginning of the trading week, with spot XAU/USD bottoming out at $1,786 an ounce as weaker-than-expected Chinese data weighed on investors’ sentiment and boosted the greenback across the board.
However, the yellow metal managed to recover above the $1,800 level and closed Monday with gains at the $1,825 area as market mood improved throughout the day. At the same time, U.S. yields – which could be considered the cost of opportunity of holding the non-yielding metal – remained depressed on Monday.
Rising bond yields have been weighing on gold prices dragging the XAU/USD from a high of $2,080 in March to below $1,800 an ounce. Treasury yields traded near three-year highs early last week before pulling back. The yield on the 10-year note was down at around 2.88% after peaking at 3.203% a week ago.
From a technical standpoint, the XAU/USD holds a short-term negative bias according to the daily chart. The MACD and the RSI hover below their midlines, although moving away from recent lows.
Still, the price has broken below an ascendant trendline drawn from August 2021 lows and trades below its main moving averages, while the 20-day SMA is accelerating below the 100-day SMA, completing a bearish cross.
On the downside, if XAU/USD breaks decisively below $1,800, the next supports are seen at the January 28 low at $1,780 and the $1,760 area, followed by the September 2021 low of $1,721 an ounce.
On the other hand, the yellow metal needs to regain the $1,835-$1,845 area, where the 200-day SMA converges with the broken trendline, to ease the short-term pressure and attempt a recovery toward $1,883, where the SMAs crossover has taken place.
However, the yellow metal managed to recover above the $1,800 level and closed Monday with gains at the $1,825 area as market mood improved throughout the day. At the same time, U.S. yields – which could be considered the cost of opportunity of holding the non-yielding metal – remained depressed on Monday.
Rising bond yields have been weighing on gold prices dragging the XAU/USD from a high of $2,080 in March to below $1,800 an ounce. Treasury yields traded near three-year highs early last week before pulling back. The yield on the 10-year note was down at around 2.88% after peaking at 3.203% a week ago.
From a technical standpoint, the XAU/USD holds a short-term negative bias according to the daily chart. The MACD and the RSI hover below their midlines, although moving away from recent lows.
Still, the price has broken below an ascendant trendline drawn from August 2021 lows and trades below its main moving averages, while the 20-day SMA is accelerating below the 100-day SMA, completing a bearish cross.
On the downside, if XAU/USD breaks decisively below $1,800, the next supports are seen at the January 28 low at $1,780 and the $1,760 area, followed by the September 2021 low of $1,721 an ounce.
On the other hand, the yellow metal needs to regain the $1,835-$1,845 area, where the 200-day SMA converges with the broken trendline, to ease the short-term pressure and attempt a recovery toward $1,883, where the SMAs crossover has taken place.