Gold Price Analysis: XAU/USD hits fresh two-month highs near $1790 as US dollar tumbles

• Gold is breaking higher towards $1800, as USD sell-off resumes.
• The US Treasury yields remain depressed amid dovish Fed bets.
• XAU/USD’s technical indicators point to more upside.

Gold (XAU/USD) is extending its three-day upbeat momentum into Monday, as the bulls clinch fresh two-month highs near $1790, fast approaching the $1800 mark.

The acceleration of the selling pressure in the US dollar in the European morning fuelled another leg up in the yellow metal. The US dollar index tumbles to fresh seven-week lows of 91.17, down 0.40% on the day.

The greenback remains heavily offered across the board, thanks to the risk-on market mood, spurred by optimism over higher vaccination rates in Europe, the UK and the US. Successful vaccine rollouts suggest a faster global economic recovery, weighing down on the safe-haven dollar.

Further, the weakness in the US Treasury yields, in the wake of dovish Fed expectations, also collaborates with the bearish tone in the buck.

The precious metal also draws support from the reports that China has granted permission to its domestic and international banks to import large amounts of gold into the country. Additionally, a favorable technical setup also backs the renewed uptick in gold.

Looking ahead, the US dollar price action and broad market sentiment will lead the way for gold traders, especially, in absence of relevant economic news from the US.

Gold: Technical levels