- Gold gained traction for the second consecutive session on Wednesday.
- Renewed COVID-19 jitters provided a modest lift to the safe-haven metal.
- An uptick in the US bond yields underpinned the USD and capped gains.
Gold edged higher through the first half of the trading action on Wednesday, albeit lacked any strong follow-through buying. The commodity was last seen hovering just above the $1,780 level, up around 0.25% for the day.
The precious metal gained traction for the second consecutive session on Wednesday and moved back closer to multi-week tops touched earlier this week. Renewed fears about another dangerous wave of coronavirus infections in some countries turned out to be a key factor that provided a modest lift to the safe-haven XAU/USD.
This marked the fourth day of a positive move in the previous five, though a combination of factors kept a lid on any further gains. Bulls once again failed near the 100-day EMA barrier, around the $1,790 region amid a goodish pickup in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.
Meanwhile, an uptick in the US bond yields assisted the US dollar to recover further from the seven-week lows touched in the previous day. This was seen as another factor that capped gains for the dollar-denominated commodity. That said, expectations that the Fed will keep rates low for a longer period should help limit the downside.
The fundamental backdrop favours bullish traders and supports prospects for additional gains. Even from a technical perspective, last week's move beyond the $1,760-65 region validated a bullish double-bottom pattern. However, it will be prudent to wait for a sustained break through the $1,790 hurdle before placing fresh bullish bets.
In the absence of any major market-moving economic releases from the US, traders might continue to take cues from the broader market risk sentiment. Apart from this, the US bond yields will influence the USD price dynamics and further contribute to produce some short-term trading opportunities around the XAU/USD.
Technical levels to watch
|Today last price||1782.88|
|Today Daily Change||4.06|
|Today Daily Change %||0.23|
|Today daily open||1778.82|
|Previous Daily High||1780.5|
|Previous Daily Low||1763.7|
|Previous Weekly High||1783.85|
|Previous Weekly Low||1723.8|
|Previous Monthly High||1759.98|
|Previous Monthly Low||1676.87|
|Daily Fibonacci 38.2%||1774.08|
|Daily Fibonacci 61.8%||1770.12|
|Daily Pivot Point S1||1768.18|
|Daily Pivot Point S2||1757.54|
|Daily Pivot Point S3||1751.38|
|Daily Pivot Point R1||1784.98|
|Daily Pivot Point R2||1791.14|
|Daily Pivot Point R3||1801.78|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.