- Gold bears struggle to regain control as the DXY index regains ground.
- Risk aversion sentiment returns amid stalled Brexit and US stimulus.
- The 21-day SMA is the level to beat for the bulls, while waiting for news on vaccines.
Gold’s (XAU / USD) recovery from Wednesday’s 1% drop has lost traction during Thursday’s European session as the US dollar bulls regained control amid bearish market mood.
Sentiment continues to be clouded by stalled US fiscal stimulus and Brexit talks, fueling demand for the safe haven of the US dollar across the board. Investors, meanwhile, remain cautious ahead of the approval of the coronavirus vaccine by the US FDA.
Furthermore, critical US macroeconomic data such as the CPI and initial jobless claims are expected by investors as new signals about the strength of the economic recovery, which could affect Wall Street sentiment and flows. monetary risk.
From a broader perspective, optimism about the 2021 vaccine-driven global economic recovery for covid and massive ETF exits have been the main catalysts behind the recent downtrend in the yellow metal.
At the time of writing, gold is virtually unchanged on the day at $ 1,838.
Gold technical perspective
Gold is forming a doji candle on the daily chart so far on Thursday, suggesting a lack of clear directional bias.
The bearish 21-day moving average at $ 1,843 is considered to limit recovery attempts in the yellow metal from Wednesday’s low of $ 1,833.
A daily close above this level is needed to reignite recovery momentum.
Higher up, the horizontal 50-day SMA at $ 1,876 is the level to beat for the XAU bulls.
On the other hand, a break out of Wednesday’s low could point to a test of the upward sloping 200-day SMA at $ 1,808.
Acceptance below that level could point to a drop below $ 1,800.
The 14-day Relative Strength Index (RSI) is trading flat just below the midline, suggesting that the bearish bias persists in the near term.
Daily chart gold
Gold technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
