- Gold continued to climb higher for the third consecutive session amid a sustained selloff of the USD.
- Hopes for more US fiscal stimulus weighed on the dollar and benefited raw materials.
- The optimism of the COVID-19 vaccine prevented the bulls from making aggressive bets and could limit the upside.
The oro It maintained its offered tone during the mid-European session and was last seen trading near the upper end of its daily range, or at week-long highs around the $ 1,840 region.
The US dollar continued its recent bearish trajectory and fell to its lowest level in more than two years on Thursday amid hopes of additional fiscal stimulus from the United States. US lawmakers have so far failed to reach an agreement, but there were early signs that a bipartisan $ 908 billion proposal could be gaining ground.
This, in turn, was seen as a key factor helping dollar-denominated commodities take advantage of this week’s positive rally from the region of $ 1,764, or close to five-month lows. Apart from this, a softer tone around US Treasury yields further boosted flows into the non-yielding yellow metal and continued to act as support.
The rally marked the third day in a row of a positive move, although optimism over developments towards the launch of COVID-19 vaccines kept any wild rally limited for the XAU / USD. Market participants are now awaiting the release of initial jobless claims and the US ISM Services PMI for further momentum.
From a technical perspective, the commodity remains below a previous strong support break point, now turned into resistance near the $ 1850-48 region. This makes it prudent to wait for some solid follow-up buying before confirming that XAU / USD has bottomed out in the short term and positioned for any further short-term appreciation moves.
Technical levels
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