Gold Price Analysis: XAU/USD buyers look to $1,900 amid cautious optimism
|- Gold picks up bids, prints second positive day following Monday’s heavy drop to the late-September low.
- Asian shares stay positive in early trade, US stock futures keep the mildly grim tone.
- Virus woes, updates on vaccine research probe earlier hopes.
- US holiday can restrict market moves, risk catalysts to keep the driver’s seat.
Gold extends the previous day’s recovery moves to $1,878.60, up 0.31% intraday, as markets in Tokyo open for Wednesday’s trading. The yellow metal slumped to the September 28 bottom on Monday before bouncing off $1,850.56. Although the US dollar’s inability to hold the early-week gains help the precious metal buyers, a light calendar in Asia and mixed signals from the key risk areas may continue challenging the commodity traders.
Stimulus hopes keep the buyers hopeful…
With a halt in China’s vaccine trials in Brazil, due to the death of a volunteer, pours cold water on the face of the market optimism, US President-elect Joe Biden’s readiness to pump the world’s largest economy, recently by healthcare measures, support the market’s optimism. Also on the positive side could be the hopes from Europe and China that Biden’s victory will offer a fresh start to their trade relations that have been noisy during Donald Trump’s ruling.
On the contrary, the return of the coronavirus (COVID-19) death toll to the early-pandemic era joins the US-China tussle and Trump’s efforts to keep the White House challenge the risk-on mood.
Amid all these plays, S&P 500 Futures print mild losses, down for the second day, whereas shares in Japan, Australia and New Zealand print gains above 1.0% by press time.
Considering the lack of clear direction following the recent drop, coupled with the holiday in the US, Gold prices are likely to extend recovery moves amid hopes of covid vaccine and further stimulus. Though, any surprises from the US polity will not refrain from taking down the yellow metal.
Technical analysis
Unless declining past-September month’s low near $1,848.80, short-term gold buyers can stay to revisit the October high surrounding $1,933. Though, the $1,900 may offer an intermediate halt during the recovery.
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.