Where Did You Gold? Gold Tumbles Below $1,800

For the first time since December, gold prices have dipped to $1,800. The price is now at $1,797.40. A massive selling took place as U.S. Treasury bond yields rose higher buoyed by news of the U.S. initial jobless claims that came in at 779,000 versus an estimate of 830,000. The U.S. ten-year note has also hit 1.158%, which is a one-year high.

Hopes of increased fiscal spending also filled the air, as the U.S. House of Representatives has taken steps to allow Democrats to push through the Biden Stimulus package, without the Republicans. The Relative Strength Index (RSI) now sits at 67, reaching an overbought condition which reflects buyers’ enthusiasm over the gold price dip. 

Analyst Joel Frank from FX Street believes that should the yellow metal manage to rise past $1,800, the resistance level will then lie at $1,802.95, which is the low recorded on Jan 18. He also reported that the price of spot gold experienced more than 2% dip yesterday as it fell from $1830s to as low of $1,785. This would be its largest dip since Jan 8. At the time of writing, the price of spot gold is at $1,803.25. 

Source: Yahoo Finance

As a risk-on sentiment increases in the market, the safe-haven gold could be further impacted. In the meantime, traders will be keeping an eye out for the release of the nonfarm payrolls later today as well as the progress of the Biden Stimulus Package, which many are expecting to drive the economy further. If the economy recovers further, the market is expecting for the U.S. Federal Reserve (Fed) to tighten their monetary policy, which would not bode well for gold.

XAU/USD (as of Feb 5, 2021, 9.30 a.m., GMT +8) - $1,797.40

FOLLOWME XAU/USD User Sentiment (as of Feb 5, 2021 at 10.00 a.m.)

Short – 46.79%

Long – 53.21%