fundamental News - XAUUSD
Gold begins early Asia-Pacific session on Monday trading on a front-foot while crossing the $1,700 threshold, currently around $1,710. Gold latest up moves come as the US Senate’s coming closer to the covid relief bill, as well as responding to the from China and concerning Saudi Arabia.
US inches closer to the much-awaited stimulus, with the 50-49 votes
for the bill known as American Rescue Plan Act, US democrats are up for
rolling out the much-awaited fiscal relief. The $1.9 trillion aid
package returns to the House after the Senate’s
passage and is likely to be voted on Tuesday before running for
President’s sign and being the law.
Other than the hopes of further fund inflow, which recently
propelled the S&P 500 Futures and favored risks, the precious metal
also benefited due to its safe-haven appeal. The reasons could be traced
from China and Yemen.
China’s Foreign Minister Wang Yi urged the US, per Bloomberg, to
“stop crossing lines and playing with fire” on Taiwan whereas
Iran-backed Houthi rebels say they targeted Saudi oil port, said the
Wall Street Journal (WSJ).
Elsewhere, China’s latest trade figures for January and February,
published during the weekend suggest a 60% jump and favor the
Antipodeans.
It should, however, be noted that the recent risk-on mood may fade
if the market players chose to analyze the impact likely fund inflow due
to the US stimulus. The reason could be traced from the reflation fears
and the jump in the US Treasury yields.
Looking forward, a lack of major data/events will keep gold traders
directed to the risk news. As a result, Treasury yields and the US
dollar moves should be observed closely.
Technical analysis
XAUUSD is set to test the key weekly support territory near $1,648
the weekly 100-SMA and below that is Fibonacci 50% level $1,620 next.
However, the weekly is illustrating that the price can now be expected
to correct back towards $1,730 the Fibonacci
38.2% before resuming the next downside move.
The weekly chart is a clearly demostrating price is now above key
support and would be expected to correct higher at this juncture.