Gold Price Analysis: XAU/USD bounces off weekly low towards $1,950

• Gold prices consolidate the heaviest losses since August 11.
• US-Iran story offers the latest reason for bullion’s pullback.
• Virus woes, US-China tussle and uncertainty over the American stimulus stay on board.
• Markets remain pressured as US dollar keeps Wednesday’s recovery, S&P 500 Futures stay depressed.

Gold prices pick-up bids from the lowest in a week to $1,937 by the initial Asian session on Thursday. The bullion dropped heavily the previous day as traders cheered the US dollar’s recovery from the multi-week low. While retracement is the best answer for the precious metal’s latest pullback, some at the floor argue over US President Trump’s comments on Iran as the additional catalyst.

Will US-Iran saga be the “Trump” card for the fresh rally?

Following US President Donald Trump’s readiness to restore nearly all United Nations (UN) sanctions on Iran, American Secretary of State Mike Pompeo crossed wires suggesting readiness to hold Russia and China accountable if they try to stop the punitive measures on Tehran. It should be noted that the US attempt to extend arms embargo over Iran failed earlier after Russia and China voted against the matter leaving Washington and the Dominican Republic to be the only yes votes. Although nothing has crossed wires from the Arab nation, on this matter, off-late, the old US-Iran story is entertaining traders amid a light calendar.

Other than the geopolitical fears, the coronavirus (COVID-19) woes and the US-China tension also offers background music to gold buyers. Furthermore, downbeat equities and greenback bulls’ pause offer additional reasons for the bullion’s latest risk. With the recent verbal attack on Iran, Beijing gains extra reason to denigrate the Trump administration, which in turn could worsen the already sour relations between the world’s two biggest economies. Elsewhere, recently receding numbers from the US, Australia and some parts of Asia aren’t a signal to the receding strength of the pandemic as global count cross 22 million on Tuesday.

Additionally, uncertainty over the American COVID-19 stimulus also weighs on the market sentiment and helps the safe-haven combat the US dollar’s bounce from 27 months.

Amid all these catalysts, S&P 500 Futures seesaws around 3,370 after the Wall Street benchmark marked 0.44% losses by the end of Wednesday.

Considering the lack of major data/events up for publishing, traders may keep eyes on the macro for fresh impetus. If the risk-off mood gains momentum without seeing any further greenback strength, the yellow metal can continue its latest recoveries.

Technical analysis

Unless declining below 50-day EMA level of $1,880, gold buyers are less likely to aim for the run-up beyond the $2,000 threshold.