- Gold managed to gain some positive traction for the second straight session on Wednesday.
- The uptick was supported by fears about the second wave of virus infections, weaker USD.
- The Fed Chair Jerome Powell did not touch the subject of negative rates and capped gains.
Gold faded a knee-jerk bullish spike to weekly tops and quickly retreated around $10 in the last hour, albeit has still managed to hold above the $1700 mark.
Following a brief consolidation through the early European session on Wednesday, the safe-haven commodity managed to gain some positive traction and was being supported by fears over the second wave of coronavirus infections.
The market concerns were reinforced by the ongoing fall in the US Treasury bond yields, which prompted some fresh selling around the US dollar and provided an additional boost to the dollar-denominated commodity.
The intraday USD selling remained unabated, rather picked up additional pace after the Fed Chairman Jerome Powell’s cautious tone, saying that the economic path was highly uncertain and was subject to significant downside risks.
However, the fact that Powell’s prepared remarks did not touch the subject of negative rates seemed to have disappointing investors betting that the central bank will push interest rates below sub-zero levels next year.
This, in turn, acted as one of the key factors that kept a lid on any further gains for the non-yielding yellow metal, rather prompted some technical selling near a resistance marked by a near one-month-old descending trend-line.
Nevertheless, the commodity was still seen trading with a mild positive bias for the second straight session. However, it will be prudent to wait for some strong follow-through selling before positioning for any further appreciating move.
Technical levels to watch
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