- Gold gains traction on Friday and recovers part of the previous day’s drop to weekly lows.
- The emergence of some new selling around the USD offers some support for the precious metal.
- A positive tone in the stock markets could limit strong gains in gold.
The gold has moved higher during the European session on Friday and has risen above the $ 1,910 level again, in new daily highs in the last hour.
The precious metal has achieved regain some positive traction on the last trading day of the week and has moved away from the weekly lows, around the $ 1,895 region touched in the previous session. The rebound is due exclusively to the emergence of some new sales around the US dollar, which tend to benefit gold prices, denominated in dollars.
Despite slow progress in the US stimulus talks, Investors remain optimistic that lawmakers will reach a deal during the next round of talks. The Speaker of the United States House of Representatives, Nancy Pelosi, reported Thursday that an agreement would be reached very soon and said progress was being made in talks with the Trump administration.
This occurs in the midst of news of the first approved treatment for coronavirus, which has boosted investor confidence and weighed on the status of the USD as a global reserve currency. However, a slight improvement in global risk appetite sentiment could weigh on demand for the precious metal’s safe haven and limit the rise in gold.
The cash flow of risk appetite has been made more apparent by a modest rise in U.S. Treasury yields, which could further help limit any runaway rally in the yellow metal, At least for the moment. This makes it wise to wait for some continuation buying before positioning for any further bullish movement.
From a technical perspective, the appearance of some purchases below the round level of $ 1,900 favors bullish traders. Therefore, a subsequent positive move above the $ 1,920 level, en route to the next major hurdle near the $ 1,931-33 resistance zone, seems like a possibility.
Credits: Forex Street
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