XAU/USD Current price: $2,128.91
Spot Gold continued its rally on Tuesday, reaching an all-time high of $2,141.81 during the American trading session. The metal gained momentum after softer-than-expected economic data from the United States, which led to a decline in the US dollar.
The Services PMI from the Institute for Supply Management contracted to 52.6 in February, missing expectations and showing a slowdown in the sector. Additionally, January Factory Orders saw a significant decline of 3.6% MoM, further supporting the bullish sentiment for Gold.
The decrease in US Treasury yields and a pullback in stock markets also contributed to the positive performance of Gold. With the Nasdaq Composite down by 1.64%, investors turned to the safe-haven appeal of the precious metal.
XAU/USD short-term technical outlook
Despite being in extremely overbought territory, the positive momentum for XAU/USD remains intact. Technical indicators show upward strength, with the 20 Simple Moving Average (SMA) continuing to rise. While a correction is possible in the short term, the overall bullish stance for Gold is supported by the moving averages.
On the 4-hour chart, Gold’s bullish trend is sustained, but there is a risk of a downward correction. Technical indicators are pointing to a potential pullback, although the moving averages signal a strong support level around $2,030. Resistance levels are seen at $2,141.80, $2,153.70, and $2,165.00.
Additional Insight:
As global economic uncertainty persists and inflation concerns rise, investors continue to turn to Gold as a safe-haven asset. The ongoing geopolitical tensions and the impact of the COVID-19 pandemic on economic recovery further contribute to the bullish outlook for the precious metal.
