August 9, 2022 10:52:26
Gold is trading with modest gains on Tuesday moving in a very range-bound manner. A weaker dollar helps to recover from the lower levels. However, a pick-up in the U.S 10-year benchmark treasury yield capped the upside gains.
Investors remain cautious ahead of the U.S consumer inflation data due on Wednesday. The data could reflect light on the Federal Reserve’s rate hike path. Further, the consumer sentiment data from New York Fed showed a fall in inflation expectations. Investors reasessd the rate of a hike by the central bank.
The subdued equity market added a headwind to the safe haven asset. Global recession worries and geopolitical tension underpinned the demand for precious metals. In the latest development, despite the scheduled end of military drills, China resumed such action around Taiwan on Monday.
U.S stock futures rose modestly on Tuesday as Wall Street look ahead to more corporate earnings and inflation data.
Dow Jones Industrial Average futures traded higher at 50 points or 0.15%.
As of press time, XAU/USD reads at $1,791, up 0.15% for the day.
Bulls challenge 50-day EMA
On the daily chart, the descending trend line from the highs of $2,070.08 made on March 7 acted as an upside hurdle for the bulls.
The price tested the trend line multiple times and retraced toward the lower levels. The precious metal makes lower highs and lower lows.
However, the bulls managed to breach the bearish trend line on August 3 with strong buying momentum. Gold is well placed above the 21-day exponential moving average at $1,754.
Currently, the price hovers near the critical 50-day exponential moving average at $1,793.55. An acceptance above the mentioned level on a closing basis would bring more gains in the asset.
On moving higher, the buyers would aim for the highs of June 29 at $1,824.95.
However, a break below the session’s low would reverse the gains in the yellow metal and could move toward $1,760 in the coming few sessions.
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