Gold Price Analysis: XAU/USD recovers further from multi-week lows, climbs to $1845 region

Gold gained positive traction for the second consecutive session on Tuesday.
A modest USD pullback was seen as a key factor that benefitted the metal.
The risk-on mood, rallying US bond yields might cap gains for the commodity.

Haresh Menghani FXStreet

Gold edged higher during the early European session and climbed to two-day tops, around the $1845 region in the last hour.

The precious metal gained positive traction for the second consecutive session on Tuesday and built on the overnight goodish rebound from the vicinity of the $1800 mark, or seven-week lows. The uptick was exclusively sponsored by a modest US dollar pullback from nearly one-month tops, which tends to benefit the dollar-denominated commodity.

That said, the prevalent upbeat market mood held bullish traders from placing any aggressive bets and might keep a lid on any strong rally for the safe-haven XAU/USD. The global risk sentiment remained well supported by the optimism over the rollout of COVID-19 vaccines and hopes for more aggressive fiscal spending under Joe Biden's presidency.

Meanwhile, expectations for a larger government borrowing triggered a fresh leg up in the US Treasury bond yields. This might turn out to be another factor that could cap the upside for the non-yielding yellow metal. Investors might also prefer to wait on the sidelines ahead of the President-elect Joe Biden's inaugural ceremony on Wednesday.

This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move. In the absence of any major market-moving economic releases, traders will look forward to US Treasury Secretary nominee Janet Yellen’s confirmation hearing for some impetus. This, along with the broader market risk sentiment, might further contribute to produce some short-term trading opportunities around the XAU/USD.

Technical levels to watch

XAU/USD

Overview
Today last price	1844.25
Today Daily Change	7.12
Today Daily Change %	0.39
Today daily open	1837.13

Trends
Daily SMA20	1878.57
Daily SMA50	1860.66
Daily SMA100	1886.17
Daily SMA200	1844.76

Levels
Previous Daily High	1840.86
Previous Daily Low	1802.8
Previous Weekly High	1863.83
Previous Weekly Low	1816.96
Previous Monthly High	1906.87
Previous Monthly Low	1775.52
Daily Fibonacci 38.2%	1826.32
Daily Fibonacci 61.8%	1817.34
Daily Pivot Point S1	1813
Daily Pivot Point S2	1788.87
Daily Pivot Point S3	1774.94
Daily Pivot Point R1	1851.06
Daily Pivot Point R2	1864.99
Daily Pivot Point R3	1889.12

Author

Haresh Menghani

FXStreet

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

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