Gold Price Analysis: XAU/USD refreshes two-week high, eyes $1,900 amid risk on mood
|- Gold bulls flirt with a fortnight top of $1,871.
- Joe Biden becomes 46th President of America, reiterates election promises, virus woes.
- WHO plans a slew of covid vaccine approvals, China rolls out US sanctions.
- Aussie employment, BOJ will decorate Asian calendar but ECB and Biden’s first day in the office will be the key.
Gold buyers pause around $1,871, recent high of $1,871.28, after rising the most in 13 days the previous day, as Thursday’s Asian session begins. In doing so, the yellow metal seesaws around the recently flashed two-week top as traders await fresh push to extend the optimism.
While Joe Biden’s entry to the White House, without any casualties, could be considered as a major reason for the latest positive mood in the market, hopes that the World Health Organization (WHO) will roll out more coronavirus (COVID-19) vaccines added to the sentiment.
Markets welcome Biden but Trump doesn’t…
Although Biden’s swearing-in ceremony couldn’t offer any immediate jump in the market, a gradual improvement could be witnessed as the Democratic member reiterated the party agenda claimed to act upon during the election promises. Ex-President Donald Trump refrained from attending the inauguration and rather left a note in the oval office for Biden.
Recently, the Biden administration feared a jump in the virus infections and pledged to tame the pandemic. The WHO is on the same page and is also said to have prepared for faster vaccine rollouts, per Reuters. It’s worth mentioning that Oxford scientists preparing new vaccine versions to combat emerging strains, per the UK’s Telegraph.
On the risk-negative side, China unveiled a list of 28 US individuals, most of them are Trump team members, to be sanctioned. Further, the virus cases have receded in the Northern hemisphere but the death toll is high and probes the risks.
Against this backdrop, S&P 500 marked record top while the rest of the Wall Street benchmarks also closed in the green for Wednesday. On the contrary, the US 10-year Treasury yields dropped 1.4 basis points to 1.078 by press time.
Moving on, Australia’s December employment figures and the Bank of Japan’s (BOJ) monetary policy meeting can entertain traders during today’s Asian calendar. Both the events are likely to provide additional strength to the upbeat sentiment. However, major attention will be given to today’s European Central Bank (ECB) monetary policy meeting and how Joe Biden acts during this first full day in the office.
Technical analysis
Sustained break of 200-day SMA, around $1,847 now, renews gold’s upside momentum. However, 50-day SMA near $1,960 and January 12 peak surrounding $1,865 probe the buyers. Meanwhile, a downside break of 200-day SMA needs a sustained break of an ascending trend line from March, at $1,829 now.
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