- Gold finds new sales at higher levels and returns to negative territory.
- Optimism around vaccine trials weighs on demand for safe haven of gold.
- A softer tone around the USD could help limit deeper losses, which warrants caution from bears.
The oro failed to capitalize on its intraday rally to the $ 1,885 region and now it’s back into negative territory for the second day in a row. The yellow metal has fallen to new daily lows just below the $ 1,875 level in the last hour.
Growing market concerns about the economic consequences of the Imposition of new restrictions due to COVID-19 in several US states has kept US dollar bulls on the defensive during the first half of trading action on Thursday. This, in turn, has been seen as one of the key factors that provided a slight boost to dollar-denominated gold prices.
The supporting factor, to a greater extent, was countered by latest optimism about a possible coronavirus vaccine. This, coupled with a positive rally in US equity futures, has weighed the precious metal’s safe-haven status and has limited any additional profit, causing some sales at higher levels.
Despite the movements in both directions, XAU / USD remains within a familiar trading range and therefore deserves some caution before opening new directional positions. From a technical perspective, recent price action has narrowed into a bullish channel, forming a bearish continuation flag pattern on short-term charts.
With that said, it will be prudent to wait for some continuation selling below channel support, currently near the $ 1,870 region, to confirm a short-term bearish breakout. XAU / USD could accelerate the decline towards strong horizontal support near the $ 1,850-48 region..
Market participants are now awaiting the US economic calendar, which features the releases of building permits and home starts, for fresh momentum at the start of the American session. The data, along with developments around the coronavirus saga and broader market risk sentiment, could generate some short-term trading opportunities around the XAU / USD.
Technical levels of gold
.
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.
