Gold Price Analysis: XAU/USD trims weekly losses towards regaining $1,900 threshold
- Gold keeps Wednesday’s gains despite recent pullback from intraday high.
- Brexit optimism, hopes of US stimulus favor market’s mood amid the quiet session.
- EU-UK statements, US Congress moves eyed for fresh impulse before Christmas.
Gold prices ease from the intraday top near $1,880 to $1,876 during early Thursday. Even so, the yellow metal stays positive for the second consecutive day amid US dollar weakness and broad risk-on mood.
US President Donald Trump’s obstruction to the bills relating to defense and covid stimulus weigh on the US dollar index (DXY) that drops 0.13% by press time.
Also weighing on the greenback, while favoring the broad risks and commodities, is US Democratic Party’s readiness to inflation the paycheck amount in the aid package from $600 to $2,000. Furthermore, chatters that the Brexit deal is imminent also favor the bulls.
Even so, US President Trump’s warning to Iran and the on-going coronavirus (COVID-19) woes in the UK challenge the risk-on mood. Additionally, dull trading session amid the holidays season restricts the market moves.
Against this backdrop, S&P 500 Futures join Asia-Pacific stocks to print mild gains.
Looking forward, policymakers from the European Union (EU) and the UK are up for delivering Brexit statements early in the European session. Should they manage to meet the market expectations, risk-on will continue to favor gold prices.
Following that, Capitol Hill will amend bills relating to defense and covid aid package, which is less likely to cause any disappointment and favor the upbeat mood.
Overall, gold prices are likely to end the year 2020 on a positive note. Though the US dollar is near a multi-month low and a bounce can consolidate the yellow metal’s gains.
Technical analysis
Considering the resistance to confirm the short-term rising wedge, with a downside break below $1,864, gold prices head towards the 100-day SMA level near $1,900.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
