Gold Price Prediction: XAU/USD set to melt on Bitcoin's fresh appeal, failure to benefit from war

 

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  Gold has failed to benefit from the major escalation in the war.
• US 10-year yields have crashed, yet the precious metal is far from last week's highs. 
• Bitcoin's fresh appeal is drawing money away from gold. 

Gold is seen as a safe haven asset and tends to benefit when US Treasury yields tumble down – and returns on Uncle Sam's debt are indeed falling. However, XAU/USD is still stuck at around $1,907, a far cry from the $1,973 level recorded last week. That is a fundamental sign of weakness.

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On the technical side, the picture is more nuanced. While momentum on the 4h-chart is to the downside, gold still trades just on top of the 50 SMA and well above the 100 and 200 SMAs. 

The precious metal's price is currently consolidating in a narrow range, but the battle lines are clear. Some support is at $1,900, which is a psychologically significant level and a daily low. It is followed by the swing low of $1,890, which is where XAU/USD closed on Friday – and the gap has since closed another bearish sign.

Further down, critical support is at $1,880, which worked both as support and resistance, making it a separator of ranges. Looking up, some resistance is at $1,913, and it is followed by the critical cap at $1,920, which held back recovery attempts. It is followed by $1,940.