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.