- Gold bulls take a breather after Tuesday’s solid comeback.
- XAU/USD jumped on renewed of the US fiscal stimulus talks.
- Dollar slump also powered the XAU bulls amid dismal US ISM PMI
- Traders await stimulus talks and US ADP jobs data for fresh cues.
Gold (XAU/USD) turned south in Wednesday’s Asian trading, having failed to find acceptance above the $1815 barrier. The XAU bulls take a breather, as markets pause after the overnight risk rally, offering some temporary reprieve to the US dollar.
The greenback licks its wound after slumping to over two-year lows against its main peers amid a return of risk appetite after the US Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi held fiscal stimulus talks since the election.
Also, a $908 billion aid proposal put forth by the Bipartisan Congress added to the weight on the greenback and sent the inflation-hedge gold 2% higher. The US dollar was further hurt by the downbeat US ISM Manufacturing PMI and Fed Chair Powell’s cautious remarks.
Despite the latest pullback, the recovery momentum in gold remains underpinned by the sell-off in the US Treasury yields and mixed Asian equities. Traders await the next batch of US macro data and stimulus updates for further upside in the metal.
Gold Price Chart: Technical outlook
“The yellow metal could test and possibly break above the descending 10-day Simple Moving Average (SMA) at $1,819. Acceptance above the 10-day SMA would shift the focus to the former support-turned-hurdle at $1,850. Alternatively, a failure to beat the 10-day SMA resistance would strengthen the odds of a re-test of Tuesday’s low of $1,775,” Omkar Godbole, FXStreet’s Analyst noted.
Gold: Additional levels
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