Gold Price Analysis: XAU/USD flirts with session lows, below $1880 level

Gold failed to preserve modest intraday gains and edged lower during the early European session.
The prevalent upbeat market mood was seen as a key factor weighing on the safe-haven metal.
The heavily offered tone surrounding the USD might help limit deeper losses for the commodity.

Haresh Menghani FXStreet

Gold witnessed some selling during the early European session and has now retreated to the lower end of its daily trading range, just below the $1880 level.

The precious metal struggled to capitalize on its early uptick, instead witnessed some selling near the $1886-87 region amid the prevalent upbeat market mood. The already strong global risk sentiment got an additional boost after UK regulators approved the use of the AstraZeneca/Oxford coronavirus vaccine.

Apart from this, hopes for additional US financial aid and growing bets on a strong global economic recovery in 2021 remained supportive of the risk-on environment. This, in turn, was seen as one of the key factors that undermined demand for traditional safe-haven assets and prompted some selling around the XAU/USD.

That said, the heavily offered tone surrounding the US dollar might extend some support to the dollar-denominated commodity and help limit any deeper losses. The USD failed to gain respite after Senate Majority Leader Mitch McConnell on Tuesday blocked the measure to raise the COVID-19 relief payments to $2,000.

Even from a technical perspective, the XAU/USD, so far, has managed to hold its neck above a one-month-old ascending trend-line support. This further makes it prudent to wait for some strong follow-through selling before trades start positioning for any further depreciating move amid year-end thin trading volumes.

Market participants now look forward to second-tier US economic data – Goods Trade Balance, Chicago PMI and Pending Home Sales – for some impetus. The data might influence the USD price dynamics. This, along with the broader market risk sentiment, might produce some short-term opportunities around the XAU/USD.

Technical levels to watch

XAU/USD

Overview
Today last price	1878.82
Today Daily Change	-0.22
Today Daily Change %	-0.01
Today daily open	1879.04

Trends
Daily SMA20	1859.46
Daily SMA50	1866.88
Daily SMA100	1895.83
Daily SMA200	1827.51

Levels
Previous Daily High	1886.5
Previous Daily Low	1871.09
Previous Weekly High	1906.87
Previous Weekly Low	1855.28
Previous Monthly High	1965.58
Previous Monthly Low	1764.6
Daily Fibonacci 38.2%	1880.61
Daily Fibonacci 61.8%	1876.98
Daily Pivot Point S1	1871.25
Daily Pivot Point S2	1863.47
Daily Pivot Point S3	1855.84
Daily Pivot Point R1	1886.66
Daily Pivot Point R2	1894.29
Daily Pivot Point R3	1902.07

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.