Gold Price Analysis: XAU/USD in stasis after ending two-week losing trend
- Gold, related markets trade comatose in a quiet start to the week.
- The dollar-bearish sentiment is still quite strong, favors upside in gold.
Gold is seeing little action on Monday, with the dollar index and US Treasury yields consolidating.
The yellow metal is trading mostly unchanged on the day near $1,854, having risen by 1.49% from $1,826 to $1,855 last week. Prices fell in the previous two weeks.
The dollar index, gold's biggest nemesis, is currently sidelined near 90.22, and the 10-year US Treasury yield is hovering near 1.09% for the seventh straight day.
Most analysts believe the path of least resistance for the dollar is to the lower side, as markets expect massive US fiscal spending under Joe Biden's Presidency. As such, gold's broader outlook looks bullish.
However, the metal could face some selling pressure in the short-run if coronavirus fears destabilize global equities, drawing bids for the battered US dollar.
Asian stocks are trading in the red at press time, possibly on reports that the new UK COVID variant is not only highly infectious but more deadly than the original strain. According to Reuters, investors are skeptical about vaccine makers' ability to supply the promised doses on time.
So far, however, the futures tied to the S&P 500 have remained positive, keeping the dollar bulls bay and gold from falling. Should markets turn risk averse, the yellow metal will likely come under pressure.
The technical picture is still not bullish, as the trendline falling from August and November highs remains intact.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
