fundamental News - XAUUSD
Gold futures posted a choppy, two-sided trade before moving slightly higher late in the session on Thursday. After an early surge, gold prices eased from a two-week high as investors booked some profit following an upside spike the previous session. Meanwhile, expectations for further stimulus and a weaker U.S. Dollar helped limit losses.
Bullish traders are betting on President Joe Biden’s $1.9 trillion
dollar coronavirus stimulus package to move smoothly through Congress.
They are also hoping it will trigger a resumption of the downtrend in
the U.S. Dollar and increased demand for dollar-denominated
gold.
Bearish traders aren’t confident in the stimulus package moving
quickly through the divided Congress. Furthermore, increasing demand for
riskier assets could keep a lid on prices. Rising Treasury yields could
also limit any gains in gold. Yields could
go up since the Treasury will have to sell more bonds to pay for the
stimulus package. In order to get the money it needs, the Treasury will
have to offer higher rates.
Technical Analysis
The main trend is down according to the daily swing chart. A trade
through $1966.80 will change the main trend to up. A move through
$1821.30 will signal a resumption of the downtrend with $1771.30 the
next target.
The minor trend is up. This means momentum has shifted to the
upside. A trade through $1821.30 will change the minor trend to down.
The longer-term range is $1467.00 to $2107.60. Its retracement zone at $1787.30 to $1711.70 is major support.
The short-term range is $1966.80 to $1821.30. Its retracement zone
at $1894.10 to $1911.20 is the next potential upside target. Since the
main trend is down, sellers are likely to come in on a test of this
area.
Short-Term Outlook
Traders are still waiting for a catalyst to move this market in a big way in either direction.
A break into the major support zone at $1787.30 to $1711.70 is likely to draw the attention of longer-term buyers.