The yellow metal is gaining traction for the second day after recording a significant drop against the result of a strong US labor market. The pair is correcting, driven by a pullback in the US dollar, as eyes are shifted to Powell’s speech today. Another positive factor that influenced Gold is the dip in the US treasury yields driven by Yellen’s comment yesterday that the recession in the US economy will be avoided as inflation is heading downwardly. Any clues regarding the monetary policy and rate outlook will have a substantial impression on the non-yield metal.
Gold continued to slide further, breaking the rising multi-week trendline. The price is trading at the lower Bollinger near 1.0765 but is struggling to break it, forming support at this level. RSI is in the bearish zone giving further hope to sellers. MACD is preserving a poor buy signal. Histogram bars are decreasing in the positive territory. Stochastic has reached its lows indicating the risk of an upward reversal in the ultra-short term. Breaking the rising trendline 1.0755 will extend the bearish trend towards 1.0734 and open the door towards 1.0687. A breakthrough here will drag the pair lower towards 1.0640. On the upside, buyers will look for breaking 1.0800 to extend the move further towards 1. 0835. Breaking the rising trendline will open the door towards 1.0866.
Key levels to watch from the upside1,881, 1,900, 1,931 – from the downside 1,859, 1,850, 1,832.