Gold Price Analysis: XAU/USD holds steady above $1865 level, lacks follow-through


  • A combination of factors extended some support to gold on the last day of the week.
  • COVID-19 jitters, dovish Fed expectations, sliding bond yields remained supportive.
  • The lack of any strong buying warrants caution before placing aggressive bullish bets.

Gold seesawed between tepid gains/minor losses through the early European session and was last seen trading around the $1865 region, nearly unchanged for the day.

The precious metal failed to capitalize on the previous day's late rebound from the vicinity of the $1850 support area and remained confined in a range amid conflicting signals from the US regarding COVID-19 stimulus. Reports indicated that US Senate Republican and Democrat leaders had agreed to resume negotiations on another coronavirus stimulus package. This, in turn, kept a lid on any meaningful upside for the XAU/USD.

The positive development, to a larger extent, was offset by the US Treasury Secretary Steven Mnuchin's decision to end some of the pandemic relief for struggling businesses. The announcement took its toll on the global risk sentiment and was evident from a fresh leg down in the equity markets. The anti-risk flow, along with a subdued US dollar price action extended some support to the dollar-denominated commodity and helped limit the downside.

Growing market worries about the economic fallout from the imposition of new COVID-19 restrictions in several US states have been fueling speculations for additional monetary easing by the Fed. This was evident from the ongoing slide in the US Treasury bond yields, which further benefitted the non-yielding yellow metal. That said, the lack of any meaningful buying interest warrants some caution for aggressive bullish traders.

There isn't any major market-moving economic data due for release from the US on Friday. This further makes it prudent to wait for some strong follow-through buying before confirming that the XAU/USD has formed a strong base near the $1850 region and positioning for any further appreciating move.

Technical levels to watch

XAU/USD

Overview
Today last price 1866.82
Today Daily Change 0.08
Today Daily Change % 0.00
Today daily open 1866.74
 
Trends
Daily SMA20 1890.76
Daily SMA50 1901.22
Daily SMA100 1908.78
Daily SMA200 1792.47
 
Levels
Previous Daily High 1874.12
Previous Daily Low 1852.8
Previous Weekly High 1965.58
Previous Weekly Low 1850.56
Previous Monthly High 1933.3
Previous Monthly Low 1860
Daily Fibonacci 38.2% 1860.94
Daily Fibonacci 61.8% 1865.98
Daily Pivot Point S1 1854.99
Daily Pivot Point S2 1843.23
Daily Pivot Point S3 1833.67
Daily Pivot Point R1 1876.31
Daily Pivot Point R2 1885.87
Daily Pivot Point R3 1897.63

 

 

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