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  • Gold wavers in a choppy range around weekly top.
  • Vaccine woes weigh on market sentiment amid a light calendar.
  • US dollar pares latest losses, Treasury yields also pause after heavy drop.
  • ECB, Fed leaders’ speech, risk catalysts will be crucial for fresh impulse.

Gold seesaws around $1,745 amid the initial Asian session on Wednesday. The yellow metal registered the heaviest gains in three days the previous day by refreshing the weekly top with $1,748.97, mainly due to the US dollar weakness. However, challenges to market sentiment seem to have recently probed the bullion buyers.

Bulls need more US dollar weakness”¦

Although a fresh three-week low of the US dollar index (DXY) pleased gold buyers the previous day, a lack of follow-through tests the commodity’s immediate upside.

While tracing the greenback’s weakness, a pause in Johnson & Johnson’s (J&J) coronavirus (COVID-19) vaccine could be considered as a major catalyst. Following the blood clotting issues, the US Food and Drug Administration (FDA)  and Centers for Disease Control and Prevention (CDC) ordered to stop using the J&J vaccine in all 50 US states.

Elsewhere, the US Consumer Price Index (CPI) came in stronger than expected whereas the US 30-year bond auction met with strong demand.

It’s worth mentioning that the geopolitical tensions are also on the rise as China recently warned the US to not inch closer to Taiwan whereas Iran signaled building Uranium. Further, the Republicans are all uniting against US President Joe Biden’s infrastructure plan and causing intermediate challenges to the sentiment.

Against this backdrop, S&P 500 Futures drop 0.05% intraday by the press time after its Wall Street benchmark joined Nasdaq 100 in refreshing the all-time high.

Given the scheduled speeches from ECB President Christine Lagarde and Fed Chair Jerome Powell, traders will wait for the key central bankers’ words before extending the latest run-up. Should the policymakers remain cautious, which is most likely, the yellow metal may witness a pullback. Though, the US dollar moves and vaccine updates will also be the key to follow.

Technical analysis

Although 21-day SMA restricts gold’s short-term downside around $1,730, a downward sloping trend line from January 29 and 50-day SMA, respectively near $1,748 and $1,755, challenges the commodity buyers.