Gold is trading upside against greenback This is mainly due to the persistent weakness US Treasury yields. But the demand for the US dollar, amid concerns over the US President Biden’s $2.25 trillion infrastructure stimulus and covid infections is acting as a barrier in the upside trading of gold.

U.S. 10-year Treasury yields has edged lower towards multi-weeks low touched last week. U.S. Federal Reserve has repeated its stance to keep monetary policy accommodative until the crisis is over, and the Fed officials have said that any spike in inflation is likely to be temporary.

ANZ analyst commented that “Inflation expectations are holding above 2.5% amid soaring commodities prices. This along with Fed’s dovish stance on the monetary policy, is keeping the backdrop supportive for bullion.”

Few investors view gold as a hedge against higher inflation that could follow stimulus measures.

Elsewhere, Fed Governor Christopher Waller said that the U.S. economy “is ready to rip” as vaccinations continue and activity picks up, but a rise in inflation is likely to be transitory, echoing comments from other Fed officials including Chair Jerome Powell over the past week.

As per a news, China recently eased restrictions for banks importing the bullion. The news hints at around 150 tons of gold imports versus the recent average of 10 tons and the year 2019 buying of 75 tons per month. Also joins the news is the chatters of India’s record gold buying of near 160 tons in March. It’s worth mentioning that India and China are the world’s biggest gold consumers and hints of increased buying from the key customers should help the bullish trend of the yellow metal.

XAU/USD 4 Hours Chart:

Support: 1762.9 (S1), 1749.3 (S2), 1738.9 (S3).

Resistance: 1786.9 (R1), 1797.4 (R2), 1810.9 (R3).

All the catalysts seems to favor the yellow metal against the greenback, we expect a bullish trend for XAU/USD.