Gold price climbed above $1,760 after Monday’s choppy move. The 10-year US Treasury yield fell more than 1% on Tuesday. According to analysts, XAU/USD needs to surpass the $1,750-$70 range to determine the next direction.
What’s going on in the gold market?
The XAU/USD pair pushed its price above $1,750 during the Asian session on Tuesday, but managed to increase its bullish momentum during European trading hours. However, after hitting the daily high of $1,765, gold lost its strength and erased its daily gains. After the weekend, US bond markets bounced back on Tuesday and the 2% drop in the benchmark 10-year US T-bond yield helped XAU/USD turn north.
The 10-year yield is down 1.5%, though it managed to break away from daily lows. Meanwhile, the US Dollar Index is trading at more than a year high at 94.51, not allowing XAU/USD to convincingly rebound. The only data from the US showed the NFIB Business Optimism Index fell to 99.1 in September from 100.1 in August on Tuesday.
According to Eren Şengezer, the gold price may visit these levels!
Despite the recent drop, the XAU/USD pair continues to trade in the $1,750-$70 range, according to analyst Eren Şengezer. Just a daily close outside this channel could trigger a decisive move. Meanwhile, the Relative Strength Index indicator on the four-hour chart continues to fluctuate between 40 and 60, confirming the view that XAU/USD is struggling to find direction.
With a break below $1,750, gold price could aim $1,735 (static level) as the next downside target before $1,725 (static level). On the other hand, the 200-period SMA is forming a key resistance at $1,780.
Credit Suisse analysts: Gold could drop to $1,565/60!
Gold price continues its consolidation below July and August highs. In the opinion of strategists at Credit Suisse, XAU/USD will see a significant drop if it drops below $1,691/77. According to analysts, XAU/USD needs to climb above $1,834/49 to enjoy a significant recovery. Credit Suisse analysts make the following comments on the subject:
Although the downside pressure appears to be increasing only below $1,691/77 will be a top for a key bearish reversal change and then support is seen at $1,620/15 before $1,655/60. Only a break above $1,834/49 could open the way for a deeper recovery towards $1,917.
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