- A softer tone around the USD helps gold gain some traction on Thursday.
- Optimism over the COVID-19 vaccine could limit the rise of the safe-haven precious metal.
- Small liquidity due to the US holiday warrants some caution before opening new directional positions.
The price of oro moves slightly higher during the European session on Thursday, staying above the $ 1,810 level but lacking a major continuation move.
Following the price movement in both directions the day before, the precious metal has managed to gain some positive traction amid a softer tone around the US dollar. The softer macroeconomic releases from the US on Wednesday joined the concerns about the economic consequences of the continued rise in new coronavirus cases and dragged the USD to its lowest level in more than two months. This, in turn, has been considered one of the key factors that have given some support to gold prices, denominated in dollars.
According to data released Wednesday, the number of Americans filing for unemployment benefits unexpectedly rose to 778,000 during the week ending Nov. 20. The pessimistic report suggests that the imposition of new restrictions due to COVID-19 was weighing on the recovery of the labor market. Additionally, the minutes from the FOMC’s November 4-5 meeting further fed speculation about additional monetary easing by the Fed in December and kept the USD bulls on the defensive.
The minutes revealed that lawmakers debated a number of options to modify the bond purchase program to support economic recovery and they judged that an update of their asset purchase guidance was needed. Participants also noted that the committee could provide further adjustments, if appropriate, which extended some additional support to the yellow metal.
Despite the supporting factors, The latest optimism about a possible coronavirus vaccine has limited any runaway bullish movements for the safe-haven XAU / USD. This makes it prudent to wait for some buying before confirming that the precious metal has bottomed out in the short term and positioning for a further recovery.
From a technical perspective, bears could expect a sustained break below the $ 1,800 level, at the four-month lows touched earlier this week, near the important 200-day SMA, before opening new positions. That being said, XAU / USD is more likely to continue its price consolidation action amid reduced liquidity conditions due to the US Thanksgiving holiday.
Technical levels of gold
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