- The prevailing climate of optimism in the market put some pressure on gold as a safe haven.
- The USD’s sustained sell bias extended some support and helped limit deeper losses.
- Investors are now on the lookout for this week’s FOMC policy meeting for some new directional momentum.
He oro it remained depressed during the early North American session, although it managed to trim a portion of its intraday losses to lows of nearly two weeks. The commodity was last traded in the region of $ 1,826, down around 0.80% on the day.
The precious metal witnessed some new selling on the first day of a new week and finally broke a two-day trading range amid the prevailing upbeat climate in the market. Global risk sentiment remained well supported by the latest optimism about the launch of vaccines for the highly contagious coronavirus disease.
Aside from this, the extension of Brexit negotiations beyond Sunday’s deadlines and hopes for additional fiscal stimulus in the United States further boosted investor sentiment. This, in turn, was seen as one of the key factors undermining demand for traditional safe haven assets and putting some downward pressure on the XAU / USD.
Risk sentiment was bolstered by a strong rally in US Treasury yields, further helping to push away some inflows of the underperforming yellow metal. However, the sustained selling bias of the US dollar extended some support and helped limit the decline in the dollar-denominated commodity.
Meanwhile, the intraday drop led to some short-term trading stops near the $ 1,824-22 region. However, the lack of robust sales tracking warrants some caution for aggressive bearish traders and positioning for any further depreciation movement amid the absence of relevant economic releases from the US markets.
In the meantime, traders could continue to take cues from the broader market risk sentiment. This, coupled with the US stimulus headlines, will influence USD price dynamics and produce some short-term trading opportunities around XAU / USD. However, the key focus will continue to be the FOMC policy meeting on December 15-16.
Technical levels
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I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.