CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money before trading CFDs.

Gold (XAU/USD) Bulls Target 1,805 USD

September 10, 2021

Talking Points:

  • XAU/USD continues yesterday’s recovery from a two-week low and refreshes intraday high.
  • Biden-Xi talks, vaccine optimism vs covid woes and economic concerns following the European Central Banks (ECB) announcement.

XAU/USD bulls drive towards 1,800 USD, up 0.25% around 1,799 USD as we head into Friday’s European trading session. In doing so, the precious metals recent positive market sentiment has continued yesterday’s rebound from a two-week low.

Following the cautious optimism from US President Joe Biden, during his recent strategy speak, during the first talks between Biden and China’s Xi Jinping since March this year. The Chinese media said, “Xi and Biden had a candid conversation on US-China ties.

Elsewhere Biden’s drive for vaccinations and masks and the UK’s approval for booster shots of the covid vaccines have added to the market’s slightly positive mood.

In addition, the cautious optimism conveyed by the policymakers of the ECB in their latest public appearances. Adding to the market’s optimism was the reduction in the US Weekly Jobless Claims.

Technical analysis.

XAU/USD is holding on to its rebound from a two-week low but the Moving Average Convergence Divergence (MACD) is giving the bears hope and the Momentum line is also causing issues for any further upside.

Another key obstacle is the convergence of the 100-day and 200-day Exponential Moving Average (EMA) around 1,805 USD which will offer strong resistance and test the bulls.

Even if the precious metal is able to break through the 1,805 USD level, a horizontal zone from mid-July around 1,834-35 USD will be a tough hurdle for the bulls to overcome.

Hence why the bears can remain hopeful and keep the 38.2% Fibonacci retracement of June-August, around 1,775 USD, as a short-term target.

However, a daily close below 1,775 USD will make the precious metal vulnerable to a sell-off towards June’s low of 1,750 USD.

In conclusion, the gold bulls will remain cautious unless the price breaks through the 1,834 USD level.

XAU/USD Daily Chart:

Open an Account. Get started in less than 5 minutes