- Gold drew some downside buying near the $ 1,885 region amid the prevailing USD sell bias.
- The underlying bullish sentiment in the equity markets kept any further gains limited.
He oro managed to rally around $ 10 from daily lows and was last seen trading in neutral territory, around the $ 1,895 region.
Having faced rejection near $ 1,900, the precious metal was down during the early part of trading action on Thursday. The pullback was sponsored solely by the underlying bullish tone in equity markets, which tends to undermine demand for the XAU / USD as a safe haven.
However, the prevailing bearish sentiment around the US dollar helped the dollar-denominated commodity attract some downside buying near the $ 1,885 region. In fact, the USD index updated multi-year lows on Thursday amid the likelihood of an additional US financial aid package.
Apart from this, expectations that the Fed will keep interest rates lower for longer extended additional support to the unperforming yellow metal. This, along with concerns about the discovery of a new variant of the coronavirus that spreads more rapidly, could also help limit the decline.
As Eren Sengezer, editor of FXStreet explains: “Despite liquidity flooding financial markets, inflation outlooks in major economies remain subdued and major central banks have expressed their commitment to maintain extremely flexible policies until they see a convincing increase in price pressures. This suggests that investors will not give up gold in the near future. “
“On the other hand, a return to normal with massive COVID-19 vaccines could make risk-sensitive assets more attractive, especially in the second half of 2021, and curb demand for the yellow metal. Overall, the outlook for gold remains optimistic and the rate of increase in prices is softening compared to 2020, ”added Eren.
Technical levels
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