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  • Gold edged higher for the fourth consecutive session on Friday amid sustained USD selling.
  • Hopes for more US fiscal stimulus, dovish Fed expectations continued weighing on the USD.
  • COVID-19 vaccine optimism undermined the safe-haven metal and capped gains ahead of NFP.

Gold traded with a mild positive bias through the early European session and was last seen hovering near two-week tops, just below the $1845 level.

The precious metal built on this week’s goodish rebound from the $1764 region, or five-month lows and edged higher for the fourth consecutive session on Friday. The uptick was supported by the prevalent bearish sentiment surrounding the US dollar, which tends to benefit dollar-denominated commodities, including gold.

The USD Index languished near a two-and-a-half-year low amid increasing bets for a new US coronavirus relief package and monetary easing by the Fed. In fact, the US House Majority Leader, Steny Hoyer, said Wednesday that he hopes to see a deal on another fiscal stimulus package worked out in principle as soon as this weekend.

Investors now seem convinced that the Fed will expand its bond-buying program in December amid worries about the economic fallout from the imposition of recent COVID-19 restrictions in several US states. This, along with a modest pullback in the US Treasury bond yields further drove flows towards the non-yielding yellow metal.

That said, the optimism over the rollout of a vaccine for the highly contagious coronavirus disease kept a lid on any runaway rally for the safe-haven XAU/USD. Bulls also refrained from placing aggressive bets, rather preferred to wait on the sidelines ahead of Friday’s release of the closely-watched US monthly jobs report.

The headline NFP is expected to show that the US economy added 469K new jobs in November and the unemployment rate is expected to tick lower to 6.8%. Any significant divergence from the expected number will infuse some volatility and produce meaningful trading opportunities around the XAU/USD on the last day of the week.

Technical levels to watch