Gold Price Forecast: XAU/USD rejected from under $1750, gains momentum amid a weaker USD
- XAU/USD rebounds more than $10 from daily lows despite higher US yields.
- A weaker US dollar and risk appetite boosted XAU/USD.
Gold trimmed losses during the American session boosted by an improvement in market sentiment. XAU/USD rose in a few minutes more than $10 and recovered ground after hitting a fresh daily low at $1748. The rebound found resistance at the $1761.50/oz area that also capped the upside on European hours.
Economic data from the US came in above expectations and helped market sentiment. The US ISM service sector rose unexpectedly to 61.9. “While this reading is below the highs reached this summer, it suggests that activity hasn't meaningfully stalled in the sector despite the rise of the Delta variant”, said analysts at Wells Fargo. Data to be released on Wednesday includes the ADP Private Employment report ahead of the Nonfarm payroll on Friday.
The Dow Jones is by 1.36% and the Nasdaq gains 1.62%. Wall Street is fully recovering from Monday’s slide. At the same time, US yields are higher on Tuesday, with the US 10-year yield at 1.53%, the highest since last Thursday.
The better mood across financial markets weighted on the greenback and helped XAU/USD. The rebound found resistance at $1763; a break higher could trigger more gains and a potential test to $1770, the next key short-term resistance. On the flip side, a consolidation below $1750 should clear the way to more losses, targeting the $1740 zone initially.
Technical levels