Gold Price Analysis: XAU/USD eyes additional upside towards $1880

Gold stands out with an upswing, trading above $1,850. As FXStreet’s Dhwani Mehta notes, XAU/USD’s bullish potential is intact despite the US dollar’s bounce.

US dollar dynamics and Fed speak in focus for near-term trading impetus

“Gold is benefiting from the risk-averse market conditions, thanks to the renewed worries about coronavirus restrictions in Asia. A major covid outbreak haunts Taiwan and Singapore while India and Japan struggle with rising cases and regional lockdowns.”

“Dovish Fed expectations and concerns over dwindling Chinese economic recovery also keep the bullish undertone intact in gold. Gold investors now look forward to the Fedspeak and dollar dynamics amid a quiet start to the week.”

“Gold prices have confirmed a rectangle breakout on the four-hour chart in early dealing, with additional upside seen towards $1880. However, with the Relative Strength Index (RSI) peeping into the overbought territory, the gold bulls could turn a bit cautious before resuming another leg higher.”

“The immediate downside is likely to be cushioned at the pattern resistance now support at $1844. The mildly bullish 21-simple moving average (SMA) at $1831 could be the next significant cap.”