Gold Price Analysis: XAU/USD licks wounds above $1,800 as market optimism fades

Gold prices probe intraday high near $1,812, up 0.30% on a day, during the early Thursday. In doing so, the yellow metal marks the highest gains in a week while trying to bounce off the lowest since mid-July, marked on Tuesday, amid mixed catalysts.

Upbeat market sentiment led by the US President-elect Joe Biden’s welcome couldn’t last long as the downbeat data from American joined the 60 million global coronavirus (COVID-19) cases, not to forget extended partial lockdowns in Germany, to challenge the bulls.

Also on the negative side are chatters surrounding the inabilities by the US and China to deliver only half of the trade promises in the last 10 months. Further, the Trump administration’s sanctions on the four firms from Russia and China also challenge the market sentiment. On the same line, Chinese state media warns Biden over his comments on Taiwan and adds to the fears of trade/political tension among the world’s top two economies.

It’s worth mentioning that Brexit fears are back on the table with fisheries continue to drag the talks.

Meanwhile, the vaccine hopes remain on the table and the Fed is also ready to do what’s needed, though not for now, per the latest FOMC minutes.

Amid these catalysts, S&P 500 Futures rise 0.17% while stocks in Japan, per Nikkei 225, are up 0.40%. Further, Australia’s ASX 200 and New Zealand’s NZX 50 are mildly offered by press time.

Given the US holiday and a light calendar elsewhere, gold buyers are likely to struggle in extending the latest recovery moves.

Technical analysis

Pin bar on the daily (D1) chart above 200-day SMA suggests further bounce off $1,798 key support. Though, September lows around $1,848/49 challenge the gold buyers.