- Gold off lows, but on track for the fifth straight daily decline.
- Likely end to Fed’s virus response program weighs on the risk tone.
- All eyes on stimulus chatter and US covid statistics.
NEWS | 19 minutes ago | By Dhwani Mehta
The recovery in gold (XAU/USD) from weekly lows of $1852.80 has regained traction in the Asian trades this Friday, as the sentiment on the global markets remains sour amid stimulus concerns and growing covid fears.
The ultimate safe-haven, gold, is benefiting from a risk-off environment induced by US Treasury Secretary Steven Mnuchin’s abrupt call to end most of the covid crisis-response programs the Fed deemed vital to keeping the economy stable.
The US dollar index nurses overnight losses amid rising coronavirus restrictions and concerns over the economic recovery amid a lack of fiscal and monetary stimulus.
The signs of life in gold can be also attributed to the sell-off in the Treasury yields across the curve, with the benchmark 10-year yields down nearly 4% to trade around 0.820%.
The yellow metal extended its previous declines on Thursday and hit fresh weekly lows just above the critical $1850 support after the sentiment improved on hopes of the revival in the US fiscal stimulus talks and promising vaccine results.
Next of relevance for the precious metal remains the chatter around fiscal stimulus talks and covid stats for fresh trading impetus. In the meantime, gold will remain at the mercy of the risk trends and US dollar dynamics.
Gold Technical levels
Immediate resistance awaits at the $1874 Thursday high, above which the bulls will gear up for a test of critical $1890 (21-DMA). To the downside, $1850/49, the September month low and November 9 low, remains at risk. Sellers will then target the $1800 mark.
Source from https://www.fxstreet.com/news/gold-price-analysis-xau-usd-attempts-a-tepid-bounce-above-1860-now-out-of-the-woods-yet-202011200211