XAU closed last week at the highs after the price of Gold kept surging to new highs due to global uncertainty and physical Gold demand from Asia. However, XAU/USD went through a retreat in the US session, after some profit taking and strong US ISM manufacturing numbers, which showed that this sector is now in expansion after two years.

Gold Chart H1 – The Retreat Has Stalled

Despite minor US dollar strength this morning and hawkish comments by Fed Governor Waller and Jerome Powell last Friday, the Gold market was rallying significantly again early today. GOLD has emerged as an outstanding performer in recent weeks, surging to $2,285 earlier today, as it was on track for $2,300. From a technical standpoint, this rally is characterized by strong buying momentum, with a target price of $2,500, which is not far off given the pacce of the uptrend.

The H1 chart for XAU/USD indicates a strong rally this morning and then the price reversed and formed a gap during the decline as well, Now GOLD is trading unchanged around the daily opening level. The same chart shows moving averages with bullish slopes well below the present level, indicating the dominance of bulls in the market.

So far, the rise in gold prices has been propelled by substantial purchases by central banks around the world seeking to diversify their reserve portfolios in response to geopolitical uncertainties, domestic inflation concerns, and the weakening of the US dollar. In China, individual investors have also been drawn to gold as the real estate industry has performed poorly.

Gold Live Chart