Gold Price Analysis: XAU/USD holds steady near $1875 amid weaker USD, lacks follow-through
- The prevalent USD selling bias extended some support to the dollar-denominated commodity.
- Brexit optimism undermined safe-haven assets and kept a lid on any strong gains for the metal.
Gold traded with a mild positive bias through the mid-European session, albeit lacked any strong follow-through buying. The commodity was last seen hovering around the $1875-76 region, a modest 0.10% gains for the day.
The precious metal edged higher for the second consecutive session on Thursday and added to the previous day's modest gains from the $1855 region, or weekly lows. The uptick was exclusively sponsored by the prevalent US dollar selling bias, which tends to benefit the dollar-denominated commodity.
However, the underlying bullish sentiment in the equity markets undermined the safe-haven XAU/USD and kept a lid on any strong gains. The latest optimism over an imminent post-Brexit trade deal partly offset concerns about the discovery of a new faster-spreading variant of coronavirus and boosted investors' confidence.
Apart from this, relatively thin liquidity conditions ahead of the Christmas holiday break further held investors from placing any aggressive directional bets. This was also cited as a key factor that contributed to a subdued/range-bound price action amid absent relevant market-moving economic releases from the US.
That said, the incoming Brexit-related headlines, along with developments surrounding the coronavirus saga might infuse some volatility in the global financial market. This, in turn, might assist traders to grab some short-term opportunities.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
