Gold (XAU/USD) is trading in a narrow range on Monday, with buyers struggling to push prices above $4,200 and sellers unable to break below $4,150. The precious metal is finding some support from a slightly weaker US Dollar, but gains are being limited by rising US Dollar yields. The US Dollar Index (DXY) is down 0.1% from its opening level, though it remains within Friday’s trading range.
Last week’s US data showed inflation remains well above the Federal Reserve’s 2% target, but Fed officials have dampened expectations of consecutive interest rate hikes. This has led traders to reduce US Dollar long positions, providing some relief for gold and other precious metals.
Technically, gold is holding a mildly bullish near-term bias, trading at $4,171. The Relative Strength Index (RSI) on 4-hour charts is near 53, while the Moving Average Convergence Divergence (MACD) remains positive. However, buyers need stronger momentum to overcome resistance near $4,200 and $4,230. A break above these levels could target the September 25 high at $4,315 and the mid-September highs around $4,400.
On the downside, bears are contained above Friday’s low near $4,150, with further support at $4,070. A breakdown below this level could increase pressure toward the $4,000 psychological area, last seen in late July and early August.