- Gold gained traction for the fourth straight session on Wednesday amid a weaker USD.
- The USD lost additional ground following the release of softer-than-anticipated CPI figures.
- A combination of factors could contain any wild rally for the safe-haven metal.
The oro it maintained its modest intraday gains during the early North American session and updated the one-week highs, well beyond the region’s CPI figures of $ 1,850 after the United States.
A subdued demand for US dollars helped the dollar-denominated commodity gain some positive traction for the fourth straight session on Wednesday. Intraday buying interest accelerated following the release of a softer-than-expected US consumer inflation report, which showed core CPI held steady in January.
In contrast, the headline CPI was in line with consensus estimates and was up 0.3% month-on-month. Meanwhile, the annual rate fell more than anticipated to 1.4% and put some additional pressure on the dollar. A sustained force beyond the $ 1,850 level may already have set the stage for an extension of momentum towards the $ 1,875-76 supply zone.
That said, a combination of factors could prevent bullish traders from placing aggressive bets and control any wild rally in the XAU / USD. Optimism about progress in vaccination against the coronavirus has fueled hopes for a strong global economic recovery. This, along with developments to accelerate US President Joe Biden’s $ 1.9 trillion COVID-19 stimulus package, continued to boost investor sentiment and could undermine demand for XAU / USD as a safe haven.
Meanwhile, expectations of massive US fiscal spending and the prevailing flow of risk provided a modest increase in US Treasury yields. This could become another factor that could further contribute to limiting earnings from the yellow metal that does not perform.
Technical levels
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