Gold Spot prices XAU/USD rallied to breach the crucial resistance level of $1,300 on Monday morning due to a weakening greenback. Price of the yellow metal had rallied early last week to trade above the $1,310 level, a new yearly high before plunging mid-week to trade below the $1,395.
And while there was a short-term rebound, it was not enough to take the XAU/USD back to the weekly high. And the pullback late on in the week brought the price of gold back below $1,300. However, on Monday, the yellow metal resumed the bull run extending gains above $1,300 to trade at $1,304 in the early morning hours.
XAU/USD (Gold) Fundamental Analysis
Fundamentally, the XAU/USD gold price has continued to endure pressure from strengthening US economy. And while there are some signals emerging that suggests there could be tougher times for the US economy ahead, the overall stock market sentiment remains positive and this is key to the performance of gold prices.
The latest weakening of the greenback may appear to have given the XAU/USD the required catalyst to rally upwards but this could as well be short-lived.
XAU/USD (Gold) Technical Analysis (the 240-min Chart)
From a technical perspective, the XAU/USD gold price appears to have recently hit the lower section of the ascending channel, which suggests that the current rebound could extend momentarily as the price rallies towards the upper trend line to possibly hit the resistance at $1,310.
This makes it very interesting for both the bulls and the bears as they target opportunities at $1,310 and $1,300, respectively.
XAU/USD (Gold) Technical Analysis (the Daily Chart)
And looking at the daily chart, the short-term bullish case still appears to be strongly supported but the 20-day and the 50-day simple moving average lines seem to suggest that the price of XAU/USD gold is unlikely to advance beyond the $1,310 level, as they both act as short-term resistance.
In summary, the XAU/USD (Gold) price pullback at the start of the month as demonstrated in the daily chart appears to have triggered a rebound. But it remains to be seen how strong this rebound will be amid a weakening US Dollar.