- Gold recovery remains limited below $1,900 area.
- XAU/USD has been buoyed by USD weakness with risk appetite picking up.
Gold futures have opened the week on a positive tone, favoured by a mildly lower US dollar amid a brighter market mood. The yellow metal has bounced up at $1,896 low to regain Friday’s losses, yet unable to confirm above $1,900/20 resistance level.
Gold ticks up, dollar eases as market sentiment improves
XAU/USD has regained most of the ground lost on Friday, buoyed by US dollar weakness amid higher hopes of a fiscal stimulus agreement in the US. House Speaker Nancy Pelosi suggested on Sunday that, despite the ongoing differences between both parties, a new package could be pushed before the Presidential Elections. This has boosted the sentiment at the week opening.
Furthermore, the drug giant, Pizer has reported that a COVID-19 vaccination might be ready by the end of the year, which has contributed to buoy the market mood further, increasing selling pressure for the safe-haven USD.
The precious metal, however, has failed to make a substantial breakup and remains trading sideways within previous days’ levels. Upside moves have remained limited below $1.900/20 area, right at where the downward trendline resistance from mid-August highs lies.
The 4-hour chart shows XAU/USD unable to extend gains beyond $1,915/20 (Trendline resistance and 200-SMA). Above here, bullion might find resistance at $1,935 (October 11 high) before aiming towards $1,960 (September 18 high).
On the downside, initial support lies at $1,897 (October 16 low) and below here, $1880 (October 8, 14 lows) and $1,870 (October 7 low).
XAU/USD 4-hour chart
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