- Gold edged higher for the second consecutive session on Thursday amid softer USD.
- The prevalent risk-on mood kept a lid on any strong gains for the safe-haven metal.
Gold traded with a positive bias through the first half of the trading action on Thursday, albeit lacked any strong follow-through and remained below the $1900 mark.
The precious metal added to the previous day’s modest recovery gains from over one-week lows, around the $1873 region and gained traction for the second consecutive session on Thursday. The uptick was exclusively sponsored by a softer tone surrounding the US dollar, which tends to underpin the dollar-denominated commodity.
Apart from this, a modest pullback in the US Treasury bond yields extended some additional support to the non-yielding yellow metal. However, the prevalent risk-on environment – as depicted by a positive trading sentiment around the equity markets – dented demand for safe-haven assets and capped the upside for the XAU/USD.
Renewed optimism over more US fiscal stimulus boosted investors’ confidence and lifted the global risk sentiment. Hopes for additional stimulus revived on Wednesday after the US President Donald Trump said that he was ready for gradual spending measures, including support for individuals, small businesses and airlines.
Meanwhile, the lack of any strong follow-through buying warrants some caution for aggressive bullish traders. This makes it prudent to wait for a sustained move back above the $1900 before positioning for any further near-term appreciating move.
Market participants now look forward to the release of the usual Initial Weekly Jobless Claims from the US. The data might influence the USD price dynamics, which along with the broader market risk sentiment will influence the XAU/USD and produce some short-term trading opportunities.