Gold holds steady near multi-year tops, just below $1800 mark

• Gold was seen oscillating in a narrow trading band through the Asian session on Wednesday.
• The downside remains cushioned amid concerns over the continuous rise in COVID-19 cases.
• A subdued USD demand further extended some support to the dollar-denominated commodity.

Gold remained confined in a range through the Asian session on Wednesday and consolidated the previous day’s strong positive move to fresh multi-year tops.

Investors remain concerned that the ever-increasing number of new coronavirus cases across the world could trigger renewed lockdown measures and once again put breaks on the economic activity. This, in turn, dampened prospects for a sharp V-shaped economic recovery and took its toll on the global risk sentiment.

The prevalent cautious mood around the equity markets continued benefitting the precious metal’s perceived safe-haven status. This coupled with a subdued US dollar price action extended some additional support to the dollar-denominated commodity and helped limit the Asian session downtick to the $1790 region.

From a technical perspective, the overnight rebound from a support marked by a one-month-old ascending trend-line, around the $1772-70 region, and a subsequent move beyond the previous swing high supports prospects for additional gains.

There isn’t any major market-moving economic data due for release on Wednesday. hence, some follow-through strength beyond the key $1800 psychological mark, towards the $1815 region, remains a distinct possibility.

Meanwhile, oscillators on the daily chart have moved on the verge of breaking into the overbought territory and warrant some caution for bullish traders, or before positioning for any further appreciating move.

Technical levels to watch