Gold Remains Stuck In The $1660 – $1675 Range

Key Insights

• Gold is moving higher as Treasury yields decline. 
• Traders will also need to monitor the dynamics of the U.S. dollar. 
• A move above the 20 EMA will push gold towards the next resistance level at $1690.

Gold Gains Some Ground At The Start Of The Week

Gold found support near $1660 and moved higher at the start of the week as the U.S. Dollar Index pulled back below the 112 level.

Treasury yields are moving lower, which is bullish for gold and other precious metals. Silver gained strong upside momentum and made an attempt to settle above the $19.50 level. Meanwhile, platinum and palladium are mostly flat at the start of the week. Platinum has settled near $865, while palladium is trading near the $2150 level.

The recent pullback in Treasury yields and U.S. dollar provided material support to gold. However, gold markets may need additional catalysts to move above the nearest resistance level at $1675.

The key question is whether safe-haven demand for gold can grow in the near term. U.S. equity markets are trading at yearly lows, while the U.S. dollar has finally faced some resistance.

If the pullback in the U.S. equity markets continues and the dollar remains near current levels, gold may enjoy additional demand from traders willing to increase their exposure to safe-haven assets.

Gold Needs More Catalysts To Move Out Of The Current Trading Range

Gold continues to trade in the range between the support level at $1660 and the resistance level at the 20 EMA at $1675. In case gold manages to settle above the 20 EMA, it will move towards the next resistance level, which is located at $1690.

A move above the resistance at $1690 will push gold towards the resistance at the 50 EMA at $1710. If gold gets above this level, it will head towards the resistance at $1730.

On the support side, gold needs to settle back below the important support level at $1660 to have a chance to gain downside momentum in the near term. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

If gold gets below the support at $1660, it will move towards the next support level at $1640. A successful test of this level will open the way to the test of the next support, which is located near the recent lows at $1620.

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