Gold is rising for the fourth straight day on Monday. The next hurdle for XAU/USD is located around $1,850 but overbought conditions may trigger a corrective decline, FXStreet’s Eren Sengezer briefs.
See – Gold Price Analysis: XAU/USD bulls come out of the shadows to mull a test of $1850 – DBS Bank
“The negative impact of the disappointing US labour market data is still being felt in the markets on Monday with the US Dollar Index slumping to its lowest level since late February near 90.00. Moreover, the benchmark 10-year US T-bond yield stays in the negative territory at 1.579% at the time of press, helping gold continue to find demand.”
“On the daily chart, the Relative Strength Index (RSI) indicator stays near 70. The last time RSI rose above that level back in early January, XAU/USD staged a deep correction and lost more than 5% in less than a week. Although the yellow metal is unlikely to make a similar correction in the current fundamental setup, it could still retreat before the next leg up.”
“On the downside, $1,820 (Fibonacci 50% retracement of the January-March downtrend) could be seen as the first support level ahead of $1,800 (psychological level, 100-day SMA). Only a daily close above the latter could discourage buyers and eliminate the near-term bullish outlook.”
“The initial target is located at $1,850, where the Fibonacci 61.8% retracement level meets the 200-day SMA. If gold manages to rise above that hurdle and turn it into support, it could aim for $1,860 (static level).”
