Gold steadily climbs to session tops, closer to $1710 level ahead of Powell’s speech

Concerns over the second wave of coronavirus infections benefitted gold’s safe-haven status.
Negative Fed rate speculations undermined the USD and remained supportive of the uptick.
The upbeat market mood might cap gains ahead of the Fed Chair Jerome Powell’s speech.

Haresh Menghani FXStreet

Gold edged higher during the mid-European session and was last seen trading near the top end of its daily trading range, above the $1705 level.

A combination of supporting factors assisted the commodity to regain some positive traction for the second straight session on Wednesday and move well within the striking distance of weekly tops. Investors remain concerns about the second wave of coronavirus infections, which turned out to be one of the key factors extending some support to the precious metal's perceived safe-haven status.

This coupled with some US dollar weakness provided an additional boost to the dollar-denominated commodity amid speculations that the Fed might be forced to push interest rates below zero. However, a positive mood around the equity markets might keep a lid on any runaway rally for the commodity as the focus now shifts to the Fed Chair Jerome Powell's scheduled speech.

Given that several FOMC member has have ruled out the possibility of negative interest rates, Powell's comments will help determine the next leg of a directional move for the non-yielding yellow metal. Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the $1720-22 supply zone, before confirming a bullish bias and positioning for any further appreciating move.

Technical levels to watch

XAU/USD

Overview
Today last price	1706.69
Today Daily Change	4.21
Today Daily Change %	0.25
Today daily open	1702.48

Trends
Daily SMA20	1705.31
Daily SMA50	1649.13
Daily SMA100	1608.59
Daily SMA200	1550.42

Levels
Previous Daily High	1711.09
Previous Daily Low	1693.76
Previous Weekly High	1723.7
Previous Weekly Low	1682.3
Previous Monthly High	1747.82
Previous Monthly Low	1568.46
Daily Fibonacci 38.2%	1704.47
Daily Fibonacci 61.8%	1700.38
Daily Pivot Point S1	1693.8
Daily Pivot Point S2	1685.11
Daily Pivot Point S3	1676.47
Daily Pivot Point R1	1711.13
Daily Pivot Point R2	1719.77
Daily Pivot Point R3	1728.46

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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