Good morning, traders.

The precious metal GOLD closed at 1738.60 after placing a high of 1742.05 and a low of 1726.50. On Monday, the prices of yellow metal remained in a tight range and moved sideways throughout the day. However, gold managed to close its trading day with minor gains at the end of the day.

Despite a dip in the US Treasury yields on Monday, gold prices failed to recover their bullish momentum and continued moving sideways for the fifth straight trading session. The yellow metal is having a hard time making a recovery due to the US dollar’s strength.

On Monday, the US Treasury yields dropped by nearly four basis points – the most significant drop in a week. However, gold remained under consolidation as the US dollar rose on the day amid the Federal Reserve Chairman Jerome Powell’s latest comments. On Monday, Powell called cryptocurrencies an unstable store of value as they are highly volatile. He also said that they are not backed by anything that makes them more unstable. He added that cryptocurrencies were a more speculative asset that substitutes for gold and not for the US dollar. So, the US central bank was in no hurry to introduce them as a competitor.

Powell’s comments supported the local currency that kept the value of the yellow metal under pressure for the day. Meanwhile, the Federal Reserve Vice Chairman Randal Quarles also warned on Monday that regulators were prepared to penalize any bank that will continue using the London interbank offer rate (LIBOR) on a new contract after this year. He said that after 2021, LIBOR’s continuous use in new contracts would create safety and soundness risks, and the bank’s practices will accordingly examine by the central bank. These comments also supported the US dollar and suppressed gold further.Furthermore, Richmond Federal Reserve President Thomas Barkin said that he was hopeful that the US economy was on the brink of completing recovery. He also added that he was not troubled by the recent sharp rise in bond yields as some were seeing them as a warning sign for an upcoming surge in inflation that could affect the economic recovery. On the data front, at 19:00 GMT, the Existing Home Sales for February from the US declined to 6.22M against the forecast 6.55M and weighed on the US dollar, and supported minor gains in yellow metal prices on Monday.

The limited gains in gold metal could also be attributed to the prospects of low demand for the yellow metal from its major buyer Turkey amid a massive drop in Turkish Lira on Monday. The safe-haven also remained under pressure on Monday as the data from a large US trial showed that the vaccine from AstraZeneca was 79% effective at preventing the coronavirus’s symptoms. This news is expected to increase this vaccine’s usage that was halted earlier this month from many European countries after some reports were linked with it related to blood clotting as a side effect of this vaccine

Daily Technical Levels
Support Resistance
1729.39 1744.94
1720.17 1751.27
1713.84 1760.49
Pivot Point: 1735.72

GOLD is trading with a neutral bias, trading at a $1,736 level amid a weaker dollar and increased safe-haven appeal. It is now gaining support around the 1,723 marks along with a resistance level of 1,755. The MACD and RSI support a buying trend now, whereas the 20 & 50 periods EMA are also suggesting a bullish bias. On the 2 hourly timeframes, the precious metal is gaining support at a 1,737 level that’s extended by an upward trendline. Gold can exhibit buying trading with an immediate target of 1,755 level. Good luck!