Where Did You Gold? – Gold Dips Further, Key Support in Sight

Gold continues its downward trend and at the time of writing, stands at $1,771. It is currently trading below its 50-day Simple Moving Average (SMA). The bearish trend is also reflected in the Moving Average Convergence Divergence (MACD), while the Relative Strength Index, presently at 56, is slowing moving upwards. The price of spot gold currently is $1,776.74. 

Source: Yahoo Finance

According to analyst Anil Panchal from FX Street, the bears must face a key support level near $1,757, which is the July 2020 low. Meanwhile, the bulls must successfully ensure a closing price above $1,805, which is the seven-week-old resistance line, to take the reins.

Over in the market, despite reassurances from the U.S. Federal Reserve (Fed) that they are not concerned over the rising U.S. Treasury yields, the markets have seemed to brush-off these comments as the U.S. Dollar Index (DXY) saw an increase.

Strength in the greenback has taken a toll on gold. Furthermore, this week has also seen positive data coming in for the U.S. such as the initial jobless claims which came in at 730,000 and lower than expected. The Consumer News and Business Channel (CNBC) also report that the U.S. fourth-quarter gross domestic product (GDP) came in at 4.1%, which is faster than the first estimate. 

A key market mover would be Biden Stimulus Package, as the U.S. House is set to take a vote today. After this, the bill can then advance to the U.S. Senate. The Democrats are keen to get this bill passed as soon as possible, especially as the Unemployment Insurance Benefits expires on March 14, slightly over two weeks from now.

The successful passing of the bill could then heighten risk-on sentiment in the market as optimism of economic recovery increases, and this could lure attention away from safe-haven gold.

XAU/USD (as of Feb 26, 2021, 10.10 a.m., GMT +8) - $1,771.00

FOLLOWME XAU/USD User Sentiment (as of Feb 26, 2021 at 10.35 a.m.)

Short – 46.26%

Long – 53.74%