Gold Price Analysis: XAU/USD fizzles upside momentum to revisit sub-$1,950 area

• Gold prices take a U-turn from intraday top of $1,955.49.
• The latest weakness ignores US dollar declines and souring market sentiment.
• Virus woes join geopolitical and trade war fears to weigh on the mood.
• US data, risk catalysts keep the driver’s seat.

Gold prices decline to $1,945 during the pre-European session on Thursday. Even so, the yellow metal prints 0.93% gains by the press time. The bullion marked the biggest losses in a week the previous day as the US dollar bounced off the 27-month low.

However, the quote’s following recovery seems to part ways from the risk moves as stocks in Asia-Pacific and S&P 500 Futures remain downbeat but the commodity declines as we write.

This also ignores the recent surge in the coronavirus (COVID-19) numbers from Germany and Australia. Further, the American intension to restore almost all United Nations (UN) sanctions on Iran and the likely US-China tussle due to the same, as China and Russia previously saved Tehran, also seemed to have been shrugged off while pulling gold back from the intraday high of $1,955.49.

The reason could be traced from the US dollar’s latest recovery moves as the US dollar index (DXY) bounces off an intraday low of 92.94 to regain 93.02 by the press time.

Looking forward, traders will have to keep eyes on the risk catalysts and the greenback moves for fresh impulse as the economic calendar is mostly empty.

Technical analysis

While failures to break the 21-day EMA level around $1,946 signals the further weakness of the precious metal, the $1,900 threshold and 50-day EMA near $1880 could question the bears afterward.