The key target for bulls arrives at $1,800 where the 100-DMA lies
Gold prices remain stuck in a familiar trading range, struggling for direction these days. The precious metal failed to challenge the 100-DMA last week and has been oscillating around $1,780 since Monday. The key target for bulls arrives at $1,800 where the mentioned moving average lies.
Following a rebound from one-and-half-week lows seen yesterday, the bullion turned negative on Thursday and refreshed daily lows, around the $1,775 area in recent trading. Earlier, the yellow metal derived support from US dollar weakness. The greenback added to the post-FOMC losses and dropped to over two-month lows.
However, investors have already digested the Federal Reserve’s dovish message while the US Treasury bond yields picked up again, helping to ease the selling pressure surrounding the dollar. Against this backdrop, fresh selling around the non-yielding yellow metal sent the prices lower.
There are some obstacles for bulls from the technical point of view as well. In particular, gold repeated failures near the $1,800 mark, suggesting the metal would need an extra catalyst to make a decisive break above this barrier. On the other hand, the bullion has been holding above the ascending 20-DMA since the beginning of the month.
Later in the day, traders will react to the release of the advance US Q1 GDP report that could affect the USD price dynamics and thus provide some impetus to the XAU/USD pair. Investors may also take cues from the broader market risk sentiment to grab some short-term opportunities.
Should US Treasury yields resume the ascent, the precious metal may see deeper losses in the short term. On the downside, the 20-day simple moving average (today at $1,760) remains in market focus. The daily RSI is pointing marginally lower today, suggesting the prices could stay under pressure so far.