- Gold treads water on Thanksgiving Day-quiet trading.
- US dollar remains depressed amid dismal macro data.
- Wednesday’s doji candle calls for indecision while $1800 holds.
Gold (XAU/USD) attempted a tepid recovery from near four-month troughs on Wednesday but faced rejection at higher levels and finished the day almost unchanged around $1807. Gold’s recovery was led by the broad US dollar’s weakness amid the resurgence of fears over the economic growth after the weekly jobless claims suggested a jump in layoffs. The continued escalation in the virus infections and the renewed restrictions seemed to threaten the economic recovery. Meanwhile, the FOMC minutes showed that the Fed remains ready to do more in December, which weighed further on the greenback.
The sellers lurked and dragged the metal lower into the close, as the vaccine narrative continued to prevail even though the focus shifted to the economic indicators. Going forward, a lack of relevant macro news and holiday-thinned light trading could keep the investors on the sidelines, although some exaggeration in the moves cannot be ruled.
Gold Price Chart - Technical outlook
Daily chart
Gold is not out of the woods, although signs of exhaustion seen on the daily chart. Bears are likely to see any bounce in the spot as a good selling opportunity following a big breakthrough the critical $1850 support earlier this week.
At the time of writing, gold remains within a familiar trading range, lacking a clear directional bias, as indicated by Wednesday’s doji candle. However, the risks remain skewed to the downside, with the $1800 level still in danger. The selling momentum could accelerate on a break below the 200-daily moving average (DMA) at $1798, opening floors towards May 18 high of $1765.
On the flip side, Wednesday’s high of $1818 needs to be taken out for the recovery to gain traction.
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