Gold Price Analysis: XAU/USD struggles to snap two-day declines below $1,900
- Gold keeps corrective recovery from $1,876.95 as risk dwindles.
- Virus conditions worsen outside the West, Tokyo to raise alert level.
- US policymakers stay unclear for the stimulus, Brexit optimism gains momentum.
- US Housing data, virus updates and other risk-related headlines will be the key.
Gold picks up bids around $1,880, currently near $1,882, during Wednesday’s Asian trading. The yellow metal dropped during the previous two days of the week as global markets couldn’t respect the coronavirus (COVID-19) vaccine developments amid rising worries of wave 2.0. Also challenging the metal buyers could be the uncertainty over the US covid stimulus and mixed sentiment concerning Brexit, economic recovery.
Risks struggle amid virus resurgence…
Pharmaceutical companies like Pfizer, Moderna and Johnson and Johnson tried keeping global traders hopeful with their covid vaccine trial updates. However, the fears that the virus is pushing the major economies towards another round of national lockdown dim the optimism. Having earlier heard of US state government measures to tame the pandemic with minor activity restrictions, the recent virus updates suggest that alert levels in Tokyo will be raised to the highest amid the increasing infections.
Elsewhere, US House Republican leader Mitch McConnell highlights no clarity over when the much-awaited COVID-19 stimulus package will be available. The politician mentioned a lack of evidence suggesting the Democratic Party’s agreement with the Republican proposal, over the aid package, as the latest reason for the deadlock.
It’s worth mentioning that the US Retail Sales disappointed in October while data from the rest of the major economies also came in mixed off-late. The same emphasizes the fact that the virus woes are still weighing on global economies.
On the contrary, the UK and the European Union (EU) are inching closer to the Brexit trade deal. Recent news indicates France easing over its demand for fisheries, the key hurdle off-late.
Against this backdrop, S&P 500 Futures print 0.11% intraday gains after Wall Street benchmarks and the US 10-year Treasury yields both portrayed sluggish mood the previous day.
Given the lack of major data/events during Wednesday’s Asian session, the precious metal traders will keep their eyes on the risk catalysts for near-term direction. Among them, coronavirus updates and vaccine news may take front seats.
Technical analysis
50-day EMA near $1,898.50, followed by the $1,900 round-figures, restrict the bullion’s short-term upside. Though, gold bears remain cautious unless witnessing a clear break below September low of $1,848.82.