Gold Price Analysis: XAU/USD bulls look to US Senate for breaking monotony below $1,900
- Gold prices await clear direction, wavers around $1,876-80 off late.
- US policymakers jostle over $2,000 paychecks in the Senate.
- Fears of covid variant battle a light calendar and sparse trading.
Gold keeps a less than $5 trading range, established during Tuesday’s late-US session, while taking rounds to $1878 amid the Asian trading session on Wednesday. The yellow metal recently struggled for a clear direction as US Congress votes on the coronavirus (COVID-19) aid stimulus following President Donald Trump’s signing of $2,00 paycheck and veto over defense bill.
Paychecks, virus in the spotlight…
While the US Senate Republican Majority Leader Mitch McConnell recently obstructed an additional payment of $1,400, considering the $600 already approved. However, the decision needs 50 votes to become law and hence may fall short to stop the much-awaited aid package. Though, the Republican majority in the Senate keeps the market cautious ahead of the decision.
Also challenging the sentiment could be the recent surge in the COVID-19 variant outside the UK. After Britain pointed out the virus strain that has a faster infection rate, even less than 10 new cases of the fresh virus trigger fears of another pandemic. Recently, the US marked the first case of the same covid variant and the worrisome fact is that the infected doesn’t have any travel history. On the other hand, UK PM Boris Johnson also extended virus led activity restrictions to more areas in Britain while noticing the faster spread.
Other than the stimulus and virus updates, traders have nothing major to take clues from, which joins a light calendar to portray a lack of gold moves.
Against this backdrop, Wall Street benchmarks eased from the record top while S&P 500 Futures print mild losses by press time.
Looking forward, the final decision on the US paychecks and virus updates can entertain gold traders ahead of the US session that contains second-tier activity and housing data.
Technical analysis
Unless regaining $1,885, comprising the previous support line from November 30, gold prices are likely to witness further pullback towards revisiting the 21-day SMA near $1,860.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
