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  • Gold gained some positive traction on Tuesday and recovered a part of the overnight slump.
  • The lack of follow-through buying warrants caution before placing aggressive bullish bets. 

Gold held on to its modest intraday gains through the early North American session and was last seen trading just above the $1875 level, off around $15 from daily tops.

As investors looked past The optimism over a promising development in late-stage COVID-19 vaccine trials faded rather quickly amid questions about the efficacy and the length of immunity provided. The scepticism assisted the precious metal to stage a goodish bounce from the vicinity of September monthly swing lows support, around the $1850-48 region.

Apart from this, a fresh leg down in the US Treasury bond yields further collaborated towards driving flows towards the non-yielding yellow metal. The uptick allowed the XAU/USD to recover a part of the overnight slump to one-month lows, albeit lacked any strong bullish conviction despite a pause in the rally across the global equity markets.

Reviving hopes for a swift global economic recovery seemed to be one of the key factors holding bulls from placing any aggressive bets. Apart from this, a modest pickup in the US dollar demand further seemed to collaborate towards capping the upside for the dollar-denominated commodity, warranting some caution before placing fresh bullish bets.

There isn’t any major market-moving economic data due for release from the US on Tuesday. However, speeches by FOMC member could influence the USD price dynamics and produce some meaningful trading opportunities around the XAU/USD.

Technical levels to watch