Gold Price Analysis: XAU/USD steadies above $1,780 after surging to fresh multi-year highs

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  • XAU/USD pair is rising for the fourth straight day.
  • Wall Street’s main indexes trade mixed on Tuesday.
  • Gold remains on track to post its highest daily close since October 2012.

The XAU/USD pair gained traction toward the end of the London session and surged to its highest level since October 2012 at $1,786. With the risk sentiment improving modestly in the American trading hours, the pair has gone into a consolidation phase and was last seen trading at $17,82, gaining 0.55% on the day.

In the absence of significant macroeconomic drivers, month-end flows in the early American session provided a boost to the precious metal. Meanwhile, the greenback came under renewed bearish pressure and allowed the XAU/USD pair’s bullish momentum to remain intact. 

The US Dollar Index, which rose to its highest level of June at 97.80 earlier in the day, is now posting small daily losses at 97.38.

Upbeat mood caps gold’s gains

Meanwhile, the latest data from the US showed that the number of coronavirus cases in key states, such as Florida and California, continued to increase, albeit at a softer pace. Moreover, US Treasury Secretary Mnuchin noted on Tuesday that the Trump administration is looking to pass an additional coronavirus relief bill by the end of July.

Boosted by these developments, the market sentiment turned positive and made it difficult for the safe-haven gold to extend its rally.

Reflecting the risk-on environment, the S&P 500 and the Nasdaq Composite indexes are gaining 0.6% and 1.15%, respectively. On the other hand, the Dow Jones Industrial Average is down 0.2% on the day.

Technical levels to watch for