- Gold prices struggle to keep the multi-year high around $1,820.
- US dollar index drops to the fresh low since March 10 as risk-on sentiment remains on the table.
- European leaders progress in unveiling 750 billion Euros of stimulus, pandemic numbers flash mixed signals.
- Updates of the aid package, virus and vaccine will be the key amid a light calendar.
Gold prices ease to $1,817.90, intraday low of $1,815.92, during the early Tuesday. Even so, the bullion remains near the highest levels since September 2011, $1,820.61, marked the previous day. While tracking the reasons, US dollar weakness becomes the key concern amid the present risk-on mood.
US dollar index (DXY) prints a three-day losing streak while declining 0.10% to 95.70. The greenback gauge versus the major currencies recently slumped to the lowest since the early-March as market’s risk-on sentiment kept the USD bulls out of the party.
While increasing odds of the coronavirus (COVID-19) vaccine and receding pandemic numbers from the US could be cited as risk-positive catalysts, hopes of further stimulus from Europe and America play their roles as the key factors. The European policymakers are finally close to 750 billion Euros of stimulus during the fifth day of negotiations. On the other hand, the US Senators are also rolling up their sleeves to haggle over the Republican-led $1.0 trillion aid package for which Democrats put a bid at $3.00 trillion, as per the Axios.
It’s worth mentioning that the RBA policymakers refrain from using additional stimulus confronts the Aussie government’s extension of income support measureshttps://www.fxstreet.com/news/australian-pm-morrison-jobkeeper-wage-subsidy-cut-to-1200-a-fortnight-split-into-two-tiers-202007210209 from October 2020 to December 2020. As per the latest measures, a wage subsidy of $1200 a fortnight for full-time workers and $750 for part-time workers will be extended.
As the European decision-makers have gone on a break and there are no major data/events to watch for, except for the virus updates from the US and Victoria (Australia), the bullion traders struggle to carry the previous bullish performance.
Against this backdrop, S&P 500 Futures stay mildly positive near 3,250 whereas the US 10-year Treasury yields seesaw near 0.61%. Further, stocks in Asia-Pacific are also bid and portray the risk-on sentiment.
Technical analysis
The bullish MACD joins the successful trading past-$1,815 to keep the bullion traders hopeful. As a result, the quote could remain direct to the north with the upper line of an immediate ascending channel, at $1,823.10, acting as nearby resistance. If at all the commodity manages to defy the channel formation and rise further, August 30, 2011 peak surrounding $1,840 will be in the spotlight. Alternatively, a downside break below $1,815 is less likely to recall the bears as the support line of the mentioned channel, currently around $1,813, could question further downside.
Source from https://www.fxstreet.com/news/gold-price-analysis-xau-usd-bulls-await-more-clues-above-1-800-202007210213