Gold Price Forecast: XAU/USD stalls the upside amid covid vaccine optimism

This Tuesday, gold price is retreating from multi-week highs, testing the bearish commitments near $1800. As FXStreet’s Dhhwani Mehta notes, covid vaccine optimism threatens XAU/USD’s upward trajectory.

Fresh covid vaccine optimism lifts market mood

“Markets cheer the renewed covid vaccine optimism after the Food and Drug Administration (FDA) on Monday granted full approval to Pfizer/ BioNTech’s COVID-19 vaccine, making it the first in the US to win the coveted designation. The vaccine approval alleviated the tensions around the Delta variant contagion. “

“The risk-on mood appears to cap the tepid bounce seen in the US dollar while fuelling over a 1% rally in the Treasury yields, which makes the non-yielding gold less attractive.”

“Gold’s daily chart shows that the upside has stalled just below the powerful hurdle at $1811, which is the confluence of the 100 and 200-Daily Moving Averages (DMA). If the downside pressure accelerates, XAU/USD could drop further towards the bearish 50-DMA at $1791, below which the horizontal 21-DMA at $1787 could get tested.”

“Gold bulls will need acceptance above the aforesaid strong resistance at $1811 to unleash additional gains towards the $1820 round figure. The buyers will then target the August highs of $1832.”