XAU / USD retraces from two-week highs, holding steady above $ 1,860 level

• Gold is failing to capitalize on its initial rally to highs in more than two weeks, around the $ 1,872 region.
• A modest pickup in demand for USD is seen as a key factor putting pressure on the precious metal.
• Hopes for more fiscal stimulus in the US could attract some lower level buying and help limit the decline.

The gold has returned its initial earnings to highs of more than two weeks and it remains virtually unchanged on the day just above the $ 1,860 level.

The precious metal has gained some traction during the first half of trading action on Tuesday and has built on the previous day’s solid bounce around $ 50 from around the region of $ 1,820. The rally marked the fifth day of positive movement of the previous six and was backed by a softer risk appetite, which tends to shore up demand for traditional safe-haven assets, such as gold.

Despite the launch of a vaccine for the coronavirus, concerns about the continued increase in new cases have weighed on investor sentiment. This has been evident from weaker business sentiment around the stock markets. The supporting factor, to a greater extent, has been seen offset by a modest pickup in demand for the US dollar, which has limited the rise in gold prices, denominated in dollars.

Meanwhile, the fall remains supported, at least for the moment, amidst the expectations that US lawmakers will accept an emergency stimulus plan for the coronavirus. Therefore, a subsequent pullback to the $ 1,855-53 region could still be seen as a buying opportunity. This, in turn, should help limit the yellow metal’s slide amid the absence of major economic releases.

Technical levels of gold