XAU/USD traded within the $3,120-$3,265

Gold’s bounce could be short-lived if buyers fail to achieve a daily close above $3,200.” Although it was achieved, sellers stepped in, dragging XAU/USD below the latter and confirming the “double top” remains in play. Momentum favors a further downside, as the Relative Strength Index (RSI) remains bearish.

Therefore, if XAU/USD holds below $3,200, the next support level would be the 50-day Simple Moving Average (SMA) at $3,155, followed by $3,100. On the flip side, if Gold clears $3,200, the next resistance would be the May 14 peak of $3,257 ahead of $3,300.

Trade active

(XAU/USD) prolongs its weekly uptrend for the third straight day and climbs further beyond the $3,300 mark, to a one-and-a-half-week high during the Asian session on Wednesday. The US Dollar (USD) selling bias remains unabated in the wake of US fiscal concerns, which led to a downgrade of the US government's sovereign credit rating last Friday. This, in turn, is seen as a key factor acting as a tailwind for the commodity.

Meanwhile, Federal Reserve (Fed) officials adopted a cautious tone on the US economic outlook. Adding to this, the growing market conviction that the US central bank will lower borrowing costs further this year drags the USD to a nearly two-week low and further the non-yielding Gold price. Moreover, renewed US-China trade tensions support prospects for a further near-term appreciating move for the safe-haven precious metal.

Note

Gold price retakes $3,300 amid a broadly weaker USD and reviving safe-haven demand

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