Article by: ETO Markets
Due to the US Dollar's strength and the negative yield on US Treasury bonds, markets are not giving much weight to the US Federal Reserve's decreased bets for dramatic rate cuts in conjunction with positive US economic data and hawkish Fed rhetoric. As markets prepare for a significant auction of US 10-year Treasury bonds later on Wednesday, the rates on US Treasury bonds are continuing to decline. The price of gold is remaining stable due to these causes.
The daily chart indicates that XAU/USD is neutral. Without sufficient impetus to support a further run north, technical indicators have turned north and are now circling their midlines. Simultaneously, the yellow metal oscillates around a level 20-SMA, which is presently around $... Positively, the 100-SMA rises above the 200-SMA and XAU/USD develops far above its lengthier moving averages, indicating a longer-term bias toward upside risk.
The likelihood of another leg north appears to be decreasing in the near future. Although XAU/USD bounced back over a flat 100-SMA, it is now batting a bearish 20-SMA and is unlikely to sustain gains above that level. Lastly, technical indicators are still in negative territory but are correcting oversold situations. If XAU/USD breaks over the immediate resistance level of $…, gold may have greater prospects.
