Gold gained more than 2.5% on a weekly basis and settled above $1,830 in the late American session on Friday. XAU/USD could extend the rebound with a break above $1,850, according to FXStreet’s Analyst Eren Sengezer.
“The European Central Bank’s (ECB) monetary policy decision is due out on Thursday. If the ECB’s policy announcements trigger a significant move in EUR/USD, it could be possible for XAU/USD to show a similar reaction through the shift in the USD’s market valuation.”
“The US Food and Drug Administration (FDA) is expected to announce toward the end of the week whether it grants authorization to the emergency use of Pfizer’s and Moderna’s coronavirus vaccines. A positive outcome is likely to help risk-sensitive assets continue to find demand and hurt the USD. However, gold suffered heavy losses in early November after those companies released their phase three trial results and XAU/USD’s upside could remain limited even if the greenback stays on the back foot.”
“The former support at $1,850, where the Fibonacci 61.8% retracement of the June-August rally is located, currently aligns as the next hurdle. A daily close above that level could open the door for additional gains toward $1,880 (50-day SMA) and $1,900 (psychological level/Fibo 50% retracement).”
“On the downside, $1,800 is an important support and the near-term outlook could turn bearish if the price retreats below that level. The next significant support could be seen at $1,725 (the starting point of the June-August uptrend).”