- Gold has pulled back after an initial rally to nearly two-week highs on Thursday.
- Risk appetite sentiment triggers some profit taking around the safe haven XAU / USD.
- The pullback in US bond yields and a weaker USD could help limit deeper losses.
He oro has witnessed a modest pullback from the two-week highs reached earlier in the session and it remains virtually unchanged on the day, around the $ 1,870 region, during Thursday’s European session.
He optimistic sentiment prevailing in the market, as shown by the current rally in global stock markets, appears to be the only factor triggered some profit-taking around the safe-haven XAU / USD. The market has been weighing the prospects for more aggressive government spending under Joe Biden’s presidency.
In fact, Biden launched a plan to pump $ 1.9 trillion into the US economy in trouble during his first hours as the new president of the United States. This joins optimism about the launch of vaccines for COVID-19, which boosted expectations for a strong economic recovery and continued to boost investor confidence.
The precious metal, for now, appears to have halted this week’s solid rebound, from near the $ 1,800 level to multi-week lows hit on Monday. Having said that, a weaker tone around the US dollar could offer some support and help limit any significant declines in gold prices, denominated in dollars.
The bulls could follow the signs of the current pullback in US Treasury yields, which tends to propel money flows toward the yellow metal. This makes it prudent to wait for a strong continuation sell before confirming that the recent positive move may have already lost momentum.
Market participants are now awaiting the US economic calendar, which includes the release of the Philadelphia Fed Manufacturing Index, initial weekly jobless claims, and housing market data. This, coupled with the broader market risk sentiment, could generate some short-term opportunities around the XAU / USD.
Technical levels of gold
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