Gold (XAU/USD) Outlook

Gold (XAU/USD)

prices consolidated on Monday but was unable to recapture resistance near the 200-day moving average at 1,261. Additional resistance is seen near the 10-day moving average at 1,290. Support is seen near the October lows at 1,241, and then the May 2016 lows at 1,200. Stronger U.S. treasury yields have buoyed the greenback, as the yield differential moves in favor of the dollar, making the price of yellow metal less attractive.
Momentum remains negative as the MACD (moving average convergence divergence) prints in the red with a downward sloping trajectory which points to lower prices. The gold market is oversold as the RSI (relative strength index) is printing a reading of 25, which is below the oversold trigger level of 30 and could foreshadow a correction.

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