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Gold Price (XAU/USD) Outlook: A Break of the 1741 Neckline Is Needed for Further Recovery

Gold prices
Gold prices

This gold price update on the XAU/USD pair shows that profit-taking and falling long-term bond yields on US Treasuries are taking a toll on the greenback, allowing the pair to pare some of last week’s losses. 

Gold price on the XAU/USD pair is up 0.95% as investors take profit following the greenback’s 2.5% rise in March 2021. This was the largest monthly gain in the US Dollar since December 2016, as traders bet on a faster-than-expected growth in the US economy and a rise in inflation from the pumping of massive stimulus money into the economy. 

Long-term bond yields are also taking a breather, with the US Treasury 10-Year asset losing more than 1.03% on the day to put some pressure on the greenback.

Technical Levels to Watch

Gold has broken above the descending trendline on the daily chart which connected the highs of 11 February to 29 March 2021. The upside move that broke this trendline came off a double bottom at 1680.59, taking out resistance barriers at 1699.43 and 1719.13. The move is now challenging the resistance at 1744.18. A break above this level opens the door towards 1763.30, with 1789.49 lining up as a potential target to the north. 

On the other hand, a failure to uncap 1741.01 opens the pathway for a potential pullback towards 1719.13, with 1699.43 also in the running if bearish momentum returns. A further collapse and bounce on 1680.59 sets up a potential triple bottom opportunity, which only comes to fruition on a successful uptick and break of 1741.01. 

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Gold Price (XAU/USD) Daily Chart

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