Gold Price Analysis: XAU/USD stays depressed below $1,850 amid risk-on mood

Gold pulls back from the intraday low of $1,833.10, down 0.08% on a day, ahead of Monday’s Tokyo open. In doing so, the yellow metal fades late Friday’s corrective recovery while taking a U-turn from $1,839.27. The reason could be traced from the S&P 500 Futures’ upbeat start of the week despite Brexit jitters.

S&P 500 Futures pierces 3,700 round-figure, currently up 0.30% to 3,701, amid the initial Asian session. The risk barometer managed to refresh the record high with 3,704.88 figures at the week’s start.

While positive developments concerning the coronavirus (COVID-19) vaccine are propelling the risks off-late, Friday’s downbeat US employment report magnified the urgency of the American covid aid package that has been in pipelines for many weeks. Identifying the need of the time, US Senate members are progressing towards the $908 billion stimulus. Though, nothing major positive has come out off-late despite the ongoing talks between Democrats and Republicans.

On the other hand, Russia recently started COVID-19 vaccination whereas the UK and the US are also inching closer to tame the pandemic that has roiled 2020.

Elsewhere, the UK and European Union (EU) policymakers are struggling over the much-awaited Brexit deal with fisheries being the latest hurdle. UK PM Boris Johnson and the European Commission (EC) President Ursula von der Leyen will discuss issues for the second time in the last three days while their representatives battle the key points of the departure deal.

It should also be noted that the Western tussle with China is also a factor that has recently gained momentum and should be watched closely as challenging the risks.

Moving on, China’s November month trade numbers and the aforementioned risk factors should be watched closely as any major deterioration in the risk-on mood can recall the gold buyers.

Technical analysis

While 21-day SMA near $1,842 offers immediate resistance, the early-November low near $1,851 also challenges the gold bulls. Alternatively, sellers are waiting for a downside break below 10-day SMA, currently around $1,817, to attack the $1,800 threshold.