Gold remained confined in a narrow trading range for the second successive day on Tuesday. A continual rise in the US bond yields underpinned the USD and capped the upside for the metal. A weaker tone around the equity markets helped limit losses for the safe-haven commodity. 

BULLISH AND BEARISH ENTRIES/ TARGET DESTINATIONS :

From a technical perspective, the XAU/USD, so far, has managed to hold its neck comfortably above the very important 200-day SMA, around the $1,800 mark. This is followed by an upward sloping trend-line extending from August 2021 swing low, currently around the $1,790 region, which should now act as a pivotal point. A convincing break below will be seen as a fresh trigger for bearish traders and pave the way for deeper losses. Gold might then accelerate the slide towards the $1,768-67 intermediate support en-route December swing low, around the $1,753 region.

On the flip side, the $1,830-32 supply zone should continue to act as immediate strong resistance. Some follow-through buying has the potential to lift spot prices to the next relevant hurdle near the $1,848-50 region. The upward trajectory could further get extended towards the $1,869-70 area en-route the $1,877 zone, or a multi-month high touched in mid-November.

Traders might also prefer to wait on the sidelines ahead of the upcoming FOMC policy meeting on January 25-26. The outcome will be looked upon for clearer signals about the likely timing when the Fed will be commencing its rate hike cycle and provide a fresh directional impetus to the XAU/USD. In the meantime, traders on Tuesday will take cues from the release of the Empire State Manufacturing Index for some short-term opportunities later during the early North American session.

Gold Remains on Steady Footing Above $1810

Jan 18 2022