Gold Price Analysis: XAU/USD hits three-week highs, tests again critical resistance around $1745
- XAU/USD holds onto daily gains as Wall Street drops sharply.
- Gold could post the highest weekly close since November 2012.
Gold prices rose further after the London fix, and reached at $1745/oz the highest intraday level in four weeks. It was unable to break the barrier around $1745/40 and pulled back modestly. It remains near the top, as Wall Street tumbles and volatility across financial markets spikes.
The Dow Jones lost more than three hundred points over the last minutes as risk aversion intensifies near the end of the week across US markets.
Gold’s momentum is easing amid the decline in equity prices that is boosting the greenback versus commodity and emerging market currencies. The US 10-year Treasury yield fell to 0.692%, the lowest in four days. Lower yields contribute to support gold prices.
XAU/USD testing critical resistance
Gold prices are back at a critical level that capped the upside over the last three weeks and that every time it traded above, it failed. The area around $1745 is critical: a weekly close clearly above could clear the way to more gains over the short-term and for a test of the intraday 2020 high at $1765 (May 18).
Another failure of XAU/USD around current levels would probably sign another correction toward the 20-day moving average that stands at $1720.
Technical levels