- Gold gained traction for the second consecutive session on Tuesday.
- Weaker US, sliding US bond yields remained supportive of the uptick.
- The risk-on mood kept a lid on any meaningful upside for the metal.
Gold surrendered a major part of its early gains to the $1884-85 region and was last seen hovering around the $1878-75 zone, nearly unchanged for the day.
Following the previous day's intraday pullback from the $1890 region, the precious metal caught some fresh bids for the second straight session and was being supported by a combination of factors. The euphoric market reaction to the positive COVID-19 vaccine news faded rather quickly amid questions over the efficacy and the length of immunity provided.
Adding to this, concerns about the continuous surge in new infections in the US and the imposition of stricter restrictions in several US states revived hopes a substantial stimulus package to support the economy. This, in turn, kept the US dollar bulls on the defensive and was seen as a key factor that benefitted the dollar-denominated commodity.
The greenback was further pressured by a weaker tone surrounding the US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal. However, the prevalent upbeat market mood – as depicted by a bullish trading sentiment around the equity markets – undermined the safe-haven XAU/USD and kept a lid on any strong follow-through.
Given that US banks will remain closed in observance of Veterans Day, investors might be reluctant to place any aggressive bets. This makes it prudent to wait for a sustained move beyond the $1900 round-figure mark before positioning for any big movements in either direction amid absent relevant market-moving economic releases from the US.
Technical levels to watch
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