Gold Price Analysis: XAU/USD refreshes four-month low below $1,830 on market optimism
|- Gold prices stay depressed after dropping to the fresh low since July 21.
- Market sentiment bolsters on formal transition powers to US President-elect Joe Biden.
- Odds of ex-Fed Chair Yellen’s Treasury Secretary role and vaccine hope are extra positives.
Gold drops to the fresh multi-month low of $1,826.53, down 0.35% intraday, during early Tuesday. The yellow metal recently took offers as US President Donald Trump flashed signs to formally shift powers to Joe Biden. Also favoring the risks could be the chatters concerning Biden’s team and the coronavirus (COVID-19) vaccines.
Although hesitantly, Trump ordered General Services Administration (GSA) to begin the process of opening the White House gates for the recently elected President Biden. This helps the Democrats to escalate the talks surrounding the COVID-19 aid package while also rushing the moves to prepare a sound team to battle the covid woes.
That said, early signals suggest Janet Yellen be the next Treasury Secretary while Antony Blinken to be the next US diplomats.
It should also be noted that the recent progress in the COVID-19 vaccine and their government approval backs hopes that the virus will be tamed sooner than later, which in turn favors the risk-on mood.
However, talks that the US is forming a trade group with Western allies to combat China joins the fears of further economic damages due to the virus, until the vaccine arrives, to probe the market optimism.
That said, S&P 500 Futures gain half a percent while stocks in Asia-Pacific mark notable upside by press time.
Looking forward, updates from the US politics and virus news will be the key catalysts for the gold traders to watch. It should, however, be noted that the gold prices are likely to bear the burden of further optimism.
Technical analysis
Having broken September lows on a daily closing, gold prices are declining towards the early July top near $1,818.
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