On Monday, gold remained bullish, but on a positive note. On the one hand, GOLD was under pressure from a stronger dollar and higher US Treasury yields; on the other hand, it found support from rising inflation fears. This upside momentum kept the precious metal bullish throughout the trading session on Monday. The US Treasury yields on the benchmark 10-year note surged for a second day on Friday and reached 1.93%, its highest since January 2020. The US Dollar Index, which measures the greenback’s value against a basket of six major currencies, also rose on Friday after declining for four consecutive sessions. The DXY reached 95.7 and remained green for the day, which kept gold prices under pressure. The upbeat US jobs data added some strength to the US dollar and raised expectations of the Federal Reserve’s rate hikes. In addition, interest rate hikes tend to increase the opportunity cost of holding non-yielding bullion, which keeps the precious metal under pressure for the day.

On the data front, at 18:30 GMT, average hourly earnings increased to 0.7%, versus the forecast 0.5%, bolstering the US dollar. The non-farm employment change rose to 467K against the forecast 110K and supported the US dollar. However, the unemployment rate from last month surged to 4.0% against the predicted 3.9% and weighed on the US dollar. However, on the other hand, some factors were pushing gold higher on Friday. Oil prices reached their seven-year highest level on Friday, adding to the existing inflationary pressures. Gold is considered a hedge against inflation, and hence, it found some support in the opposite market momentum due to high inflation. US officials say that Russia has about 70% of the military equipment it needs to invade Ukraine in the next few weeks. This means that the tensions between Ukraine and Russia aren’t going to go away any time soon.

US sources expect the tensions to increase by mid-February as Moscow brings in more heavy equipment. Russia has deployed more than 100,000 troops near Ukraine borders, but it has denied planning to attack. These escalated tensions between Russia and Ukraine added to the geopolitical uncertainty and raised the safe-haven demand for gold.

Gold (XAU/USD) Technical Outlook

On Tuesday, the technical side of gold remains bullish at $1,822 amid weaker US labor market figures. Gold completes a 50 percent Fibonacci retracement at $1,818 and has violated it to go after 61.8% Fib level. Gold is currently trading at $1,822 and is heading north towards an immediate resistance level of $1,826. On the lower side, its next support level is at 1,811, which is extended by a double bottom level.

On the bullish side, XAU/USD may encounter resistance at the $1,822 level. The uptrend can be extended by 61.8 percent Fib levels until the $1,826 level. Because the MACD is above 0, the chances of a buying trend remain high. So, consider remaining bullish if the price crosses above 1,818, and vice versa. Best wishes!