- Gold continues to find some support above the 200 day SMA around $ 1,800.
- A moderate demand for the USD is considered a key factor that benefits the yellow metal.
- Optimism over the COVID-19 vaccine weighs on safe haven gold prices and limits earnings.
The oro it has managed to rebound from an intraday drop to the region of $ 1,803, although it has lacked strong follow-on buying. At the time of writing, gold is trading in the region of $ 1,810, practically unchanged on the day.
A softer tone around the US dollar has helped dollar-denominated gold prices, to bounce once again from near the $ 1,800 region, a support marked by the very important 200-day SMA. But nevertheless, optimism about a possible coronavirus vaccine continues to affect demand for traditional safe-haven assets and limits any movement significant to the upside for XAU / USD.
The US dollar is extending its recent downward movement and has seen Pressured by unimpressive macroeconomic data from the US, raising expectations for more fiscal stimulus from the incoming Biden administration. The dollar has been further pressured by a further downward movement in US Treasury yields, offering some additional support to the yellow metal, although the bulls lack conviction.
The positive factor, to a greater extent, has been offset by market optimism, which has limited the rise of the safe-haven precious metal. Global risk sentiment remains supported by progress in vaccines for COVID-19. This, coupled with the smooth start to President-elect Joe Biden’s transition to the White House, has fueled investor appetite for riskier assets, weighing on gold.
From a technical perspective, the inability of gold to make a significant recovery suggests that the recent selling bias may still be far from over. In the absence of major economic releases on Friday, the outlook remains skewed in favor of the bears. Therefore, any recovery attempt could be seen as a selling opportunity and runs the risk of quickly disappearing.
Technical levels of gold
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
