The rally in gold prices continued on Thursday, following the US dollar slump and lower long-term bond yields. These events came on the back of the dovish FOMC minutes released on Wednesday, which showed several policymakers indicating that the conditions for tapering had not been fully satisfied. This allowed the gold price on the XAU/USD pair to extend its winning streak into the fifth day.
Furthermore, long-term bond yields slumped 3.18%, down for a 3rd straight day and leading to fresh gold demand.
Gold price is sensitive to US interest rates. Any indication that rates will not rise soon is seen as a gold-positive scenario. Also adding to gold demand is a transient rise in inflationary pressure, which several FOMC members think is the situation with the recent increases in the Core PCE Price index and the Consumer Price index data.
Gold price is up 0.68% as of writing.
Technical Levels to Watch
The recovery from the double bottom on the XAU/USD daily chart has met resistance at the 1815.20 price mark. If the ascent continues, the price wall between 1828/1840 becomes the next barrier to the north. Above this price wall, new targets are seen at 1860.77 and 1881.68.
On the other hand, a retreat from the current resistance allows the gold price to retest the 1800.00 psychological price area, with 1789.49 and 1763.30 serving as additional support targets.
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Gold Price: Daily Chart
