The yellow metal is consolidating after Tuesday’s rebound above $1850, gathering tempo for the next price line higher. The US dollar’s decline alongside with the Treasury yields is keeping the XAU buyers hopeful amid expectations of a multitrillion-dollar stimulus likely to be announced by President Joe Biden on Thursday.
Traders are rethinking about the recent rally in Treasury yields against the Fed’s tapering talks and increasing Covid-19 cases. Gold is currently trading near $1860 per ounce, representing a 0.37% gain on the day.
The jump from Monday’s one-month low of $1816 has taken the shape of a bear flag pattern on the 4-hour chart. A bear flag is a break that often refreshes lower, recharging bears’ engines for a more profound decline.
A move under the lower end of the flag, currently at $1840, would confirm a breakdown and imply a continuation of the decline from the Jan. 6 high of $1959. The immediate support line is seen at $1816 ad $1,800.
Today Wednesday, traders will be looking at the US monthly CPI figure in the afternoon for further cues on down pressure of the metal.
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