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• Gold price refreshed nine-month highs above $1,935 in European trading.
• The uptick in US Treasury yields is capping Gold’s upside amid the subdued US Dollar.
• Upside bias remains intact for Gold price amid a bullish daily technical setup.

Gold price is retreating from the highest level seen in nine months at $1,938 in the Europen session, as the renewed uptick in the US Treasury bond yields is aiding the recovery in the US Dollar. Meanwhile, the US Dollar also seems to benefit from cautious optimism, amid dovish Federal Reserve expectations, mixed US corporate earnings reports, and weak domestic economic data.

Investors are also resorting to repositioning heading into the Fed’s ‘blackout period’ and China’s Lunar New Year holidays, starting next week. Meanwhile, the focus will remain on the speeches by the Fed policymakers Patrick Harker and Christopher Waller for the next directional move in the Gold price, as those will be the last words from the US central bank ahead of its February 2 policy announcement.
 

Gold price technical outlook

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Gold price: Daily chart

To the upside, Gold buyers gather strength for a test of the $1,950 psychological level, above which the confluence of April 20 and April 22 highs around $1,958 will come into play.  

The 14-day Relative Strength Index (RSI) is peeping into the overbought territory, at around 71.00, suggesting that there is more room to the upside.

On the flip side, Gold sellers will once again challenge the horizontal support line just beneath $1,900.

Further south, the correction could resume toward the $1,865 region, the meeting point of the January 11 high and the ascending 21-Daily Moving Average (DMA) merge.

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