Gold Price Analysis: XAU/USD struggles near multi-month lows, just above $1800 mark

  • Gold remained under some heavy selling pressure for the second straight day on Tuesday.
  • COVID-19 vaccine optimism was seen as a key factor weighed on the safe-haven commodity.
  • Dovish Fed expectations undermined the USD, albeit failed to lend any support to the metal.

Gold continued losing ground through the mid-European session and dropped to fresh four-month lows, closer to $1800 mark in the last hour.

The precious metal prolonged its recent rejection slide from the $1900 mark and witnessed some heavy selling for the second consecutive session on Tuesday. The downfall marked the fifth day of a negative move in the previous six and was exclusively sponsored by the prevalent upbeat market mood, which tends to undermine demand for traditional safe-haven assets, including gold.

The global risk sentiment remained well supported by the latest optimism over a potential vaccine for the highly contagious coronavirus diseases. Adding to this, the formal go-ahead for the US President-elect Joe Biden to begin his White House transition and reports that former Fed Chair Janet Yellen could become the next US Treasury Secretary further boosted investors' confidence.

Meanwhile, speculations that the Fed might ease further in December amid concerns about the economic fallout from the continuous surge in new coronavirus cases continued weighing on the US dollar. A broad-based USD weakness, however, did little to lend any support to the dollar-denominated commodity or hinder the intraday slide to the lowest level since July 20.

That said, slightly oversold conditions on intraday charts might hold investors from placing fresh bearish bets. Hence, any subsequent slide is more likely to remain limited and find decent support near the very important 200-day SMA, currently around the $1795 region. However, any meaningful recovery seems elusive and any attempted recovery is likely to remain short-lived.

Market participants now look forward to the US economic docket, featuring the releases of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index. The data might influence the USD price dynamics and produce some short-term trading opportunities around the XAU/USD during the early North American session.

Technical levels to watch


Today last price 1811.62
Today Daily Change -24.50
Today Daily Change % -1.33
Today daily open 1836.12
Daily SMA20 1886.06
Daily SMA50 1897.46
Daily SMA100 1910.27
Daily SMA200 1795.22
Previous Daily High 1876.14
Previous Daily Low 1831.01
Previous Weekly High 1899.14
Previous Weekly Low 1852.8
Previous Monthly High 1933.3
Previous Monthly Low 1860
Daily Fibonacci 38.2% 1848.25
Daily Fibonacci 61.8% 1858.9
Daily Pivot Point S1 1819.37
Daily Pivot Point S2 1802.63
Daily Pivot Point S3 1774.24
Daily Pivot Point R1 1864.5
Daily Pivot Point R2 1892.89
Daily Pivot Point R3 1909.63



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 


GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 


Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News