Gold prices has been reached higher on today supported by easing U.S. bond yields and concerns over rising Delta variant infections, while investors focused on the Federal Open Market Committee’s meeting this week. Coronavirus cases continued to rise over the weekend with a number of countries in Asia and Europe battling to control the outbreak of the highly contagious Delta variant.

A stronger dollar makes gold more expensive for other currency holders. Gold is likely to continue taking its cue from movements in Treasury yields and the USD.

Dollar index which is a measure of the currency against six major peers, stood at 92.920 at the start of the week, off from last week’s 3-1/2-month high of 93.194. It was still up about 3.8% from a recent low on May 25 as an improving U.S. economy bolstered the outlook for the Federal Reserve to start paring asset purchases as early as this year. Though lockdown restrictions are getting gradually removed, price volatility in the precious metal is putting off retail investors. 

Physical gold demand in India was lacklustre last week with buyers put off by price volatility, forcing dealers to raise discounts to their highest in nearly a month to encourage purchases. Speculators raised their net long positions in COMEX gold in the week ended July 20, data from the U.S. Commodity Futures Trading Commission showed.

Market participants now await the U.S. central bank’s meeting on Tuesday and Wednesday. While no policy change is expected, investors will look out for clues on when the Fed might start reining in its easy monetary policies.

On gold traders’ radar this week will be the outcome of US Federal Reserve meeting after the European Central Bank on Thursday pledged to keep interest rates at record lows for some time. Analysts say that though coronavirus risks, inflation concerns and mixed economic number are keeping gold supported at lower levels, ETF investors continue to remain on sidelines awaiting fresh cues.

XAU/USD 4 Hour Chart:

Support: 1790.7 (S1), 1779.8 (S2), 1770.0 (S3).

Resistance: 1811.4 (R1), 1821.2 (R2), 1832.2 (R3).

Amidst this catalysts plays a major role, yellow metal is on positive moment. We expect a bullish trend for XAU/USD.