Home Forex XAU/USD is consolidating around $1,930, Fedspeak was watching

XAU/USD is consolidating around $1,930, Fedspeak was watching

by SuperiorInvest
  • The price of gold in European trading renewed nine-month highs above $1,935.
  • A rise in U.S. Treasury yields is curbing gold’s gains amid a subdued U.S. dollar.
  • Upside bias remains intact for gold price amid bullish daily technical setup.

Gold is retreating from a nine-month high of $1,938 in the European session as a renewed rise in U.S. Treasury yields helps the U.S. dollar recover. Meanwhile, the US dollar also appears to be benefiting from cautious optimism, amid dovish expectations for the Federal Reserve, mixed US corporate earnings reports and weak domestic economic data.

Investors are also resorting to a move into the Fed’s “blackout period” and the Chinese Lunar New Year holiday that begins next week. In the meantime, the focus will be on the speeches Fed politicians Patrick Harker and Christopher Waller for another directional move in the price of gold, as these will be the Fed’s final words before its February 2 policy announcement.

Gold price technical outlook

Gold Price: Daily Chart

On the upside, gold buyers are gathering strength for a test of the psychological $1,950 level, above which the confluence of the April 20 and April 22 highs around $1,958 will come into play.

The 14-day Relative Strength Index (RSI) is peering into overbought territory around 71.00, suggesting more room for upside.

On the upside, gold sellers will once again challenge the horizontal support line just below $1,900.

Further south, the correction could continue towards the $1,865 region, the meeting point of the January 11 high and the ascending 21-day moving average (DMA) consolidation.

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