Gold Price Analysis — February 8

Gold Price Analysis — February 8

Gold (XAU/USD) traded on a sideways momentum through the early European session on Monday between the $1819 resistance and the $1808 support. The yellow metal appears to have attracted some dip-buyers over the past few hours and might build on Friday’s bullish recovery from its recent decline to a two-month low.

However, the uptick lacked any obvious fundamental catalyst and could get capped by the prevalent market risk mood.

Meanwhile, massive strides in mass COVID-19 vaccinations continued to bolster optimism for a strong global economic recovery. This factor, coupled with the proposed $1.9 trillion US fiscal stimulus plan, further improved investors’ risk confidence and extended additional support to the prevailing rally in the equity markets. Consequently, this market sentiment could prevent investors from placing aggressive bets on gold.

In other news, expectations of a massive government borrowing to fund the stimulus caused the 10-year US Treasury bond yield to spike to a one-year high. The prevailing surge in the US bond yields has helped revived strong demand in the US dollar (DXY), which tends to undermine demand for the dollar-denominated commodity.

Moving on, there are no major market-moving data releases from the US today, making it advisable to wait for some follow-through momentum before confirming any trend. In the meantime, the prevailing market risk sentiment will continue to influence the price action of the precious metal.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — February 8

XAU/USD Major Bias: Sideways

Supply Levels: $1819, $1827, and $1838

Demand Levels: $1808, $1800, and $1787

Gold posted strong gains on Friday, following a steep decline to a two-month low around $1785. At press time, the commodity is trading at $1811, as it continues on a range-bound momentum amid the absence of any catalysts.

That said, it seems unlikely (not impossible) for gold to fall below the $1808 support in the meantime, as we expect a bullish recovery to the $1838-50 level later in the North American session today.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.