XAU/USD Daily Technical Analysis – 19 January
GOLD moving past the $1915 level amid the dropping US Treasury Yields
XAU/USD price is trying to recover its previous day’s losses on Thursday after moving past the resistance of $1908.00 in the European Trading Session. Since its session started, the precious metal has moved as high as 1916.00. Still, the outlook of yellow metal is bullish, given the declining returns on the US government bonds.
On Thursday, the 10-year US Treasury yields extended their losses for the second consecutive session. And dropped to as low as 3.321%. The yield decline is attributed to the reduced inflation forecasts. The policymakers from Federal Reserve are putting forward their plans to increase the interest rate by another 25bps in the upcoming February meeting. This stance raised expectations for falling inflation figures in the coming months and put pressure on US yields.
Furthermore, the US Dollar Index (DXY) also declined by -0.15% on the day to 102.20, supporting the rising prices of XAU/USD. Meanwhile, the market risk sentiment was also negative due to the lack of demand for the S&P500 futures. Thus, the risk-perceived currencies were facing trouble in finding upside momentum.
Additionally, the gold prices also found support from mixed sentiments around China, one of the largest consumers of gold. Also, the China Lunar New Year holidays are coming, giving central banks a reason to prepare for the upcoming potential inactive week.
XAU/USD Daily Technical Analysis
The Gold prices are trying hard to move past a critical resistance level of $1917.00. With the prices already hovering above the MA line, there are clear signs of a potential resurgence in its bullish trend. The Stochastic RSI is also backing the signal that the downside is restricted for a while. The prices are expected to break this resistance level soon, and they might try to recover the previous day’s losses. However, the Moving Average line at 1908.00 is acting as a support level for XAU/USD price.
Until you don’t see GOLD break the $1917.00 resistance level or fall below the $1908.00 support, it might be better to wait and observe the market before taking any decision to avoid trading mistakes. Any break above $1917 is a great level to open a long position. However, if the support level is broken, there are chances for reversal.
During the American Market session, the release of the Unemployment Claims report for this week might clear the signal. Traders will be watching this report which is anticipated as 214K. Any reading above this figure could weigh on USD and provide extra strength to the rising prices of GOLD, and vice versa.
Daily Technical Levels
Pivot Point: 1908.87