On Monday, just as it appeared that gold was about to enter a new downtrend. Bulls jumped back on the bids and made another attempt to break through the $2,000 barrier. So far this Tuesday, gold is consolidating the previous rebound below $1,990. Awaiting mid-tier data from the United States and speeches from US Federal Reserve (Fed) policymakers.
Investors assess inflation risks and the dismal factory data from the United States.
Following a negative start to the week for the US Dollar. Gold traders are now looking forward to the release of mid-tier US economic data later in the day. Including JOLTS Job Openings and Factory Orders, for new trading impetus. Wall Street sentiment will also play an important role in US Dollar valuations. Influencing the USD-denominated gold price.
Furthermore, speeches from the Federal Reserve officials will be watched closely. In the run-up to Friday’s critical Nonfarm Payrolls data from the United States. It is worth noting that national holidays in China. The world’s largest gold consumer, may cause gold prices to remain choppy within a familiar range.
Gold Technical Outlook
Gold bulls managed to stage a solid comeback and recapture the latter after breaching the critical rising trendline support, then at $1,961.
A bullish 14-day Relative Strength Index (RSI) that remained well above the midline justified the move. The RSI is currently above 50.00, which keeps gold buyers motivated.
As a result, a downside break from a two-week-old pennant formation appears elusive, as bulls seek a sustained break above the falling trendline resistance at $1,990 to validate a breakout.
Following confirmation of the pennant breakout, the XAU price may regain traction, with an eye on the key $2,000 level.
The yearly high of $2,010 and the next significant resistance levels are stacked up. On the other hand, the rising trendline, now at $1,968, provides immediate support, below which gold sellers are likely to regain complete control.
On further declines, Monday’s low of $1,950 will be a challenge. XAU bulls’ final line of defense is seen at the strong support of $,1935, where the bullish 21-Daily Moving Average (DMA) aligns.
