- Gold witnessed some selling for the third straight session amid a stronger USD.
- The cautious mood sustained safe-haven commodities and helped limit losses.
- US GDP showed 4% growth in the fourth quarter, but did little to boost.
He oro it remained defensive during the early North American session, although it managed to keep its neck above the daily lows. The commodity was last seen trading just below the $ 1,840 level, down around 0.50% on the day.
The precious metal added to this week’s losses and witnessed some subsequent selling for the third straight session on Thursday. The drop was solely sponsored by the resurgence in demand for US dollars, which tends to undermine demand for dollar-denominated commodities, including gold.
A delay in the supply of the COVID-19 vaccine further fueled concerns about the potential economic damage caused by the pandemic and benefited the dollar’s status as a global reserve currency. The USD was further supported by doubts about the timing and size of a new US economic stimulus package.
On the economic data front, the advanced fourth quarter US GDP report showed that the economy expanded at an annualized rate of 4.0% during the fourth quarter of 2020. This was in line with market expectations. , though it marked a considerable loss of growth momentum amid the imposition of strict restrictions.
That said, a cautious mood in the equity markets extended some support to the XAU / USD safe haven and helped cap any deeper losses, at least for the moment. This makes it prudent to wait for a strong sales follow-up before positioning yourself for any further depreciation moves.
Looking at the technical outlook, XAU / USD confirmed a short-term bearish breakout through a symmetrical triangle on Wednesday. Therefore, the short-term bias remains skewed in favor of bearish traders and supports the prospects for a retest of monthly lows, around the $ 1,800 round figure.
Technical levels
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