ln Tuesday’s trading session, XAU/USD experienced a surge, reaching $2,035, reaffirming its bullish momentum in the daily chart. Despite central banks hesitating on imminent rate cuts, bullish sentiment continues to dominate, supported by lower US Treasury yields—a key factor for investors holding non-yielding metals.
However, the hourly outlook suggests a potential strain as investors consolidate gains, leading to a loss in momentum, as indicated by weakening technical indicators.
A closer look at the daily chart signals the prevailing strength of the bulls. The positive upslope of the Relative Strength Index (RSI) and the increasing green histogram bars of the Moving Average Convergence Divergence (MACD) indicate robust buying momentum. Additionally, with the price trading above its 20, 100, and 200-day Simple Moving Averages (SMAs), it underscores the dominance of buyers in the longer-term trend. As long as buyers maintain control above the 20-day average, the short-term outlook remains positive.
Shifting the focus to the hourly chart, signs of momentum exhaustion emerge as investors consolidate gains. This suggests that, in the absence of fundamental stimuli, the price may continue trading flat in anticipation of Wednesday’s Asian session.
