Where Did You Gold? Gold Bulls Remain Watchful

In the early hours of trading today, XAU/USD dipped to $1,851.39 and subsequently paring the gains to 0.50%. Analyst Anil Panchal at FX Street believes that the bulls will probably remain watchful while waiting for the price to break past $1,875. If this happens, there is a potential to hit the mid-November 2020 top around $1,900.

At the time of writing, the price of spot gold is at $1,871.80. The Moving Average Convergence Divergence (MACD) for XAU/USD is indicating a bullish trend, while the Relative Strength Index (RSI) is fast approaching an overbought condition, and presently stands at 68. 

Source: Yahoo Finance

In terms of market movers, the present volatility on Wall Street due to the recent GameStop saga could serve as an advantage to gold, as traders might want to stay out of the turmoil on Wall Street at the present moment. In related news, silver has also experienced a spike after a similar encounter like GameStop, where retail investors were encouraged via Reddit, a social media platform, to purchase silver and drive up the price.

All eyes would also be watching the release of January’s nonfarm payroll reports this Friday, with forecast indicating a nominal increase in hiring last month. In a recent statement, the Federal Reserve Chairman, Jerome Powell has stated that the progress of economic recovery is tied to the vaccination rollout. The Financial Times reported that although the number of new Coronavirus cases is declining in the U.S., the number of deaths recorded in January are at a record high. As the race of the spread of the virus against the progress of the vaccine heightens, a risk-off sentiment would very well benefit the yellow metal.

Sources: Investing.com, FX Street

XAU/USD (as of Feb 1, 2021, 11.15 a.m., GMT +8) - $1,864.20

FOLLOWME XAU/USD User Sentiment (as of Feb 1, 2021 at 11.35 a.m.)

Short – 51.87%

Long – 48.13%