Gold Price Analysis: XAU/USD bulls await a move beyond 100-day EMA near $1,790 level

• Gold gained traction for the second consecutive session on Wednesday.
• Renewed COVID-19 jitters provided a modest lift to the safe-haven metal.
• An uptick in the US bond yields underpinned the USD and capped gains.

Gold edged higher through the first half of the trading action on Wednesday, albeit lacked any strong follow-through buying. The commodity was last seen hovering just above the $1,780 level, up around 0.25% for the day.

The precious metal gained traction for the second consecutive session on Wednesday and moved back closer to multi-week tops touched earlier this week. Renewed fears about another dangerous wave of coronavirus infections in some countries turned out to be a key factor that provided a modest lift to the safe-haven XAU/USD.

This marked the fourth day of a positive move in the previous five, though a combination of factors kept a lid on any further gains. Bulls once again failed near the 100-day EMA barrier, around the $1,790 region amid a goodish pickup in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.

Meanwhile, an uptick in the US bond yields assisted the US dollar to recover further from the seven-week lows touched in the previous day. This was seen as another factor that capped gains for the dollar-denominated commodity. That said, expectations that the Fed will keep rates low for a longer period should help limit the downside.

The fundamental backdrop favours bullish traders and supports prospects for additional gains. Even from a technical perspective, last week’s move beyond the $1,760-65 region validated a bullish double-bottom pattern. However, it will be prudent to wait for a sustained break through the $1,790 hurdle before placing fresh bullish bets.

In the absence of any major market-moving economic releases from the US, traders might continue to take cues from the broader market risk sentiment. Apart from this, the US bond yields will influence the USD price dynamics and further contribute to produce some short-term trading opportunities around the XAU/USD.

Technical levels to watch