Gold Price Forecast: XAU/USD cheers USD weakness above $1,800
All eyes turn to the US data this week to determine the likely timings of a taper, or not to taper.
The US dollar will depend on this week's calendar in the US and so too will the price of gold.
On the upside, a break of the 1,840s opens risk to $1,870. On the downside, bears look to clear below $1,769.
Update: Gold (XAU/USD) takes the bids to refresh intraday high around $1,815, up 0.20% on a day, during early Tuesday.
After a sluggish start to the day, not to forget downbeat weekly opening, gold regains upside momentum as the US Dollar Index (DXY) fails to extend the previous days rebound from a two-week low, down 0.07% intraday around 92.64 at the latest. In addition to the greenback weakness, cautious optimism in the markets and mildly bid S&P 500 Futures, not to forget a three-day downtrend of the US 10-year Treasury yields, also favor gold buyers of late.
Behind the moves could be the recently easing virus numbers from Asia–Pacific, after refreshing the multi-day tops, as well as Chinas downbeat activity numbers that back the need for easy money policies.
However, gold traders remain cautious ahead of Fridays US jobs report as Fed Chair Jerome Powell announced tapering but refrained from details and booster investor sentiment on Friday.
The price of gold is sitting at $1,810 in early Asia following an overnight down day of some 0.38%.
XAG/USD had travelled between a low of $1,807.78 and $1,823.27 highs.
The US dollar remains subdued also, following on from a virtual annual Jackson Hole Symposium 2021 on Friday.
DXY, an index that measures the US dollar against a basket of six major rival currencies, suffered an outside down day on Friday due to a more dovish than expected rhetoric from the Fed's chairman, Jerome Powell.
There was a long build-up to Friday's speech and there was anticipation in the markets for more clues of the timings of a taper of the Fed's Quantitative Easing.
However, nothing new came from the event which resulted in an unwinding of additional speculative long US dollar positions, at least in the spot market.
The main takeaway, which risk assets cheered, came from Powell's explicit pronouncement of the disconnect from QE tapering and eventual interest rate rises.
Powell stated that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff”.
As a consequence, the index is now on track to test the August 13 low near 92.471 with a low on Monday scored at 92.598.
A break below would set up a test of the July 30 low near 91.782: