Where Did You Gold? – Gold Pushes Past $1,700 Amidst Hope of Gold Bulls' Return

Gold has been trading sideways since experiencing a decline below $1,700. However, at the time of writing, the price has gained some momentum upwards and currently stands at $1,702.80. It is now trading below the 50-day Simple Moving Average (SMA).

At present, the Relative Strength Index (RSI) has dropped from an overbought condition of 84 to 49. Currently, the price of spot gold is $1,708.

Analyst Anil Panchal from FX Street believes that the bulls will only make a strong case that they are staying upon overcoming resistance near $1,765, which is the low from November 2020. 

Source: Yahoo Finance

In the markets, the Biden Stimulus Package has made a significant breakthrough. The U.S. Senate has approved the bill, and it has now moved back to the U.S. House before making it to President Biden’s desk to be signed into law.

Vaccination efforts continue to progress with the latest data from Bloomberg reported that in 114 countries, more than 304 million vaccines doses have been administered, fuelling hope of a more normal world to return soon.

On Friday, the U.S. nonfarm payrolls spectacularly beat expectations and came in at 379,000. The positive data heightened the risk-on sentiment in the market at the prospect of economic recovery. The Telegraph also reported that the unemployment rate has decreased by 0.1% to 6.2%. These positive data could lend support to the USD instead.

However, the prices of the U.S 10-Year Treasury yields continue to rise, sparking inflation rise. Growing anticipation over economic recovery could very well lure traders away from the safe-haven gold. However, gold’s role as an inflation hedge could lend support to the gold bulls, and that all hope is not lost for the bulls just yet.

With that, it will be interesting to watch as the bulls and bears continue their war for dominance here.

XAU/USD (as of Mar 8, 2021, 10.55 a.m., GMT +8) - $1,702.80

FOLLOWME XAU/USD User Sentiment (as of Mar 8, 2021 at 11.58 a.m.)

Short – 47.32%

Long – 52.68%