Forex Marketz Daily Forex News – Fully Markets Update
The spot gold futures contract (XAU/USD), continues to move lower in a descending price action channel. Gold is under pressure from a stronger U.S. dollar which has gotten a boost from rising Treasury yields.
Spot gold traders are looking at new fiscal stimulus out of the United States. Over the weekend, the U.S. Senate, along party lines, passed President Joe Biden’s massive coronavirus fiscal relief package. This package is worth $1.9 trillion and includes onetime payments to U.S. households worth $1,400. The Senate vote was 50-49 in favor of the bill. All Democrats voted in favor.
All Republicans voting against the bill. However, the Democratic Party was divided on key issues. One issue was about raising the Federal minimum wage to $15 per hour, which failed to get the votes needed.
U.S. Treasury yields which are rising. This is making the American dollar more attractive and hurting spot gold prices.
Germany, the largest economy in the European Union, will release monthly industrial production data. The United States is will publish monthly wholesale inventory data. Gold traders will also monitor a Treasury Department bond auction. Bank of England Governor William Bailey will be giving remarks.
Daily Spot Gold Technical Analysis (XAU/USD)
Looking at the above daily MT 4 price action chart, this futures contract is under pressure as the 14 day relative strength index (RSI) trends below thirty (30). This is near oversold and signals that this trend lower is maybe corrective in nature.
However, until gold breaks above this descending trend channel, the bears will likely stay in control. A daily close above $1,740 per ounce is needed to challenge the next layer of technical resistance in play at the descending trend line.
This is upside barrier is at $1,760. The 20 day simple moving average at $1,780 per ounce then comes into play. The multi-month low price point at $1,687 is the first layer of technical support. The next downside barrier lines up at $1,680 with the 1 June 2020
