It appears that Gold is benefiting from a weaker USD as it crossed $1980 during the Monday session. The US 10-year bond yield was last seen below 3.5% after turning negative for the day.
The recent ISM Manufacturing PMI data is also gloomy, which is also fueling the bullish momentum in the XAU/USD (Gold). In addition, the RSI(14) indicator is now also moving in the oversold territory, which is also making the Gold bulls braver.
Trouble Ahead For Gold Bulls
Just because we have seen some bullish moves in the Gold doesn't mean the coast is all clear... The MACD indicator is bearish, and the ascending trend line was also pierced recently. In addition, the XAU/USD continues to trade below the 100 HMA and the 200 HMA.
All of these factors are keeping the bears of XAU/USD hopeful of a comeback... This means that XAU/USD has only turned bullish for the short term while the bearish signs are still present all around us.
Based on this information, it appears that the recovery in the Gold will not be confirmed unless we see a break above the $1960 resistance.
And immediately after the $1960 level, we have the $1970 level, which will also provide trouble for the Gold bulls.
Another important technical reading that can't be missed is the resistance from March 20 that continues to slope downwards. This area is present at around $1987 for now and will also put a cap on Gold's price.
Meanwhile, a break of the swing low located at $1950 will send the Gold prices near the $1933 level.
Based on all this information, Gold prices are still under the influence of the bears despite the short-term recovery.
And if the Fed actually introduces yet another rate hike, then the Gold prices will yet again turn south amid the rising strength of the USD. But that's far away, and we will have to wait for the Fed's upcoming meeting to see the results.