- Gold wavers in a choppy range between $1,841 and $1,830 after bouncing off seven-week low.
- US dollar pullback, risk consolidation entertained gold buyers amid a dull day with the US markets off.
- Virus woes battle vaccine hopes, politics keep traders busy.
- Incoming Treasury Secretary Janet Yellen’s speech, President-elect Joe Biden’s formal entry into the White House be the key.
Gold eases from the top of an immediate $10 trading range while declining to $1,837 at the start of Tuesday’s Asian session. The yellow metal took a U-turn from the lowest since December 01 the previous day as the US dollar stepped back after refreshing the one-month high. However, holiday in the US markets and a light calendar elsewhere keeps the bullion prices in a tight range ahead of important events.
Markets brace for the key days…
The extended weekend in American cooled down the US dollar upside following the initial run-up to refresh the highest levels since December 21. The reason could be traced to the initial cautious sentiment ahead of the Biden government’s inauguration and the coronavirus (COVID-19) worries. However, upbeat data from China and expectations that US President-elect Joe Biden and company will easily rollout the promised $1.9 trillion covid aid package improved market sentiment afterward.
Although Biden’s optimistic plan needs Senate’s approval and that’s where his team member Janet Yellen will play a big role, her latest prepared Senate remarks for Tuesday’s speech suggest favor for the huge relief package considering record low-interest rates.
On a different page, Italy’s Prime Minister Giuseppe Conte wins the chamber of deputies’ confidence vote by 321-259, as expected, but is left to win in the Senate to keep the nation’s reign. Herein, Conte will need over 321 votes to turn down the shock from former ally Matteo Renzi.
Talking about the virus, covid cases in Europe, the US and the UK ease off-late but aren’t satisfactory as the strains are spreading faster, which in turn cause fresh activity restrictions. Elsewhere, Asia and Pacific’s nations are taking precautionary measures after finding a few cases of the COVID-19 variants as mass vaccinations begin.
Amid these plays, S&P 500 Futures mark mild gains while the US dollar index (DXY) prints minor losses around 90.75 by press time.
Looking forward, second-tier economics and virus updates in Asia may provide intermediate moves to the gold traders ahead of the key speeches from Yellen and Biden, not to forget monetary policy meeting by the ECB.
Technical analysis
Unless breaking a range between 200-day SMA and an upward sloping trend line from March, respectively around $1,845 and $1,823, gold prices are likely to remain sideways.
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