XAU / USD is hovering near two-week highs, around the $ 1,870 zone

• Gold built on the positive move overnight and gained some traction on Tuesday.
• A softer risk tone was considered to be one of the key factors benefiting the safe haven product.
• A modest rally in US bond yields extended some support to the USD and could limit gains.

The oro It traded with a slight upside bias during the early North American session and was last seen hovering around the two-week highs around the $ 1,870 region.

The precious metal built on the previous day’s good positive intraday move from the $ 1,822 zone and gained some traction on Tuesday. The rally marked the fifth day of a positive move in the previous six and helped the commodity prolong its recent strong rally from the four-month lows touched on November 30.

Optimism about the launch of a vaccine for the highly contagious coronavirus disease and the prospects for additional fiscal stimulus in the United States were overshadowed by concerns about the continued rise in new cases. This, in turn, weighed on investor sentiment and was evident from a modest pullback in equity markets. The flow of risk aversion turned out to be a key factor providing a modest boost to traditional safe-haven assets, including gold.

Meanwhile, a modest rally in US Treasury yields extended some support to the US dollar, which, in turn, could limit any further gains for the underperforming yellow metal. That said, the short-term bias remains tilted in favor of bullish traders and supports the prospects for a move towards horizontal resistance at $ 1,889-90. The positive momentum could eventually help the XAU / USD to regain the $ 1,900 level.

In the absence of major economic releases to move the US market, broader market risk sentiment will continue to play a key role in commodity influence. This, coupled with USD price dynamics and US fiscal stimulus headlines, could further contribute to producing some significant trading opportunities around XAU / USD.

Technical levels