Gold Price Analysis: XAU/USD consolidates biggest losses in two weeks with eyes on $1,850

Gold bounces off $1,825 to pare the biggest losses since November 23.
Risks dwindle as traders turn cautious ahead of the key risk decisions.
UK PM Johnson’s visit to Brussels, US FDA’s vaccine approval and stimulus passage keep traders worried.
Gold ETFs marked the first outflows of the year in November.

Anil Panchal FXStreet

Gold prices nurse recent losses while picking up bids near $1,840 during the early Thursday morning in Asia. The yellow metal not only snapped the two-day winning streak while reversing from the two weeks high but also posted the heaviest declines in 13 days the previous day. The shift in the risks and news concerning the outflow of the gold Exchange Traded Funds (ETFs) did the most harm to the bullion. Additionally, the market’s cautious mood ahead of the important announcement relating to Brexit, US stimulus and the coronavirus (COVID-19) vaccine also weighed the quote.

Bears cheer aftershocks of bad November…

Having witnessed the biggest monthly losses in four years during November, gold traders also took out from the ETF holdings, by 107 tonnes, during the stated period. This marks the first negative print of the ETF statement in the year and offered an additional reason for the bullion sellers, other than the earlier advances of equities, to move away from the commodities.

Even if the equities bear the burden of uncertainty over US stimulus and Brexit during the US session on Wednesday, gold sellers kept the reins as the US dollar rose for the fourth consecutive day amid a cautious mood. The risk aversion, or consolidation, could also be traced to the increasing COVID-19 cases from the US and wait for the vaccine. Furthermore, the US-China tussle and move in the up-move US real yields also dragged the precious metal the previous day.

Amid these plays, Wall Street benchmarks couldn’t please the bulls, with Nasdaq witnessing the worst day in a month after refreshing the record top, whereas the US 10-year Treasury yields rose around 2.5 basis points (bps) by the end of Wednesday’s North American session.

Looking forward, market players are eagerly waiting for the comments from Brussels as well as any updates on the US stimulus, even if the stopgap funding is passed, for fresh impulse. Also in the pipeline is the ECB decision and the US Food and Drug Administration’s (FDA) approval of Pfizer’s vaccine. While most of the stated decisions are likely to come in positive, any surprises won’t be taken lightly and may offer further room to gold sellers.

Technical analysis

Failures to cross 50-day SMA, currently around $1,876, pull gold prices backward to highs marked in early July and late November near $1,818/17.

Additional important levels

Overview
Today last price	1839.64
Today Daily Change	-31.04
Today Daily Change %	-1.66%
Today daily open	1870.68

Trends
Daily SMA20	1844.35
Daily SMA50	1878.49
Daily SMA100	1911.74
Daily SMA200	1806.51

Levels
Previous Daily High	1875.34
Previous Daily Low	1860.32
Previous Weekly High	1848.3
Previous Weekly Low	1764.6
Previous Monthly High	1965.58
Previous Monthly Low	1764.6
Daily Fibonacci 38.2%	1869.6
Daily Fibonacci 61.8%	1866.06
Daily Pivot Point S1	1862.22
Daily Pivot Point S2	1853.76
Daily Pivot Point S3	1847.2
Daily Pivot Point R1	1877.24
Daily Pivot Point R2	1883.8
Daily Pivot Point R3	1892.26

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.

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