Where Did You Gold? – Gold Bulls Receive Support to Fight Back, Will the Bears Show Up Again?

Gold’s downward spiral took a turn for the worse when it dropped below $1,720. However, it has since been moving upwards and presently stands at $1,742.90, above its 50-day Moving Average. The Moving Average Convergence Divergence (MACD) is presently reflecting a bullish trend. At the time of writing, the Relative Strength Index (RSI) is trending towards an overbought condition and is currently at 69. The current price of spot gold is $1,741.48. 

Source: Yahoo Finance

For the bulls to continue their momentum, they must overcome resistance at $1,765, according to analyst Anil Panchal from FX Street. Meanwhile, for the bears, key support rests at $1,683, which is the descending trend line support from Aug 2020.

A risk-on sentiment is heightening in the market, with the U.S. House passing the $1.9 trillion Biden Stimulus Package, which includes the $1,400 stimulus cheques. The bills can now pass to the Senate. Although the Republicans have voiced their concerns over the size of the package, more than 150 senior executives from various industries in the U.S. have signed a letter to lawmakers as a voice of support according to a report from Bloomberg on Feb 24. The letter has been signed by the Chief Executive Officers (CEO) of Google, Goldman Sachs, and AT&T.

Meanwhile, further progress has also been made on the vaccine front, with the U.S. Centres for Disease Control and Prevention voting to recommend using the Johnson and Johnson vaccine for the U.S., making it the first of the three authorised vaccines in a single dose, according to Cable News Network (CNN).

In the coming days, traders would most likely be keeping an eye out on the movement of the U.S. Treasury yields, especially as the U.S. 10-year Treasury yield surged past 1.5% last week, for the first time since Feb 2020.

Apart from this, the release of China’s Caixin Manufacturing Purchasing Managers Index (PMI), the U.S. ADP employment change, and nonfarm payrolls this week would be key events that can impact the risk sentiment, alongside any progress on the Biden Stimulus Package.

XAU/USD (as of Mar 1, 2021, 10.10 a.m., GMT +8) - $1,742.90

FOLLOWME XAU/USD User Sentiment (as of Mar 1, 2021 at 11 a.m.)

Short – 52.18%

Long – 47.82%