Gold Price Analysis: XAU/USD jumps to multi-day tops, around $1855 region

• Concerns about the ever-increasing coronavirus cases benefitted the safe-haven gold.
• Positive COVID-19 vaccine news boosted investors’ confidence and might cap the upside.
• Technical set-up favours bulls and supports prospects for a move towards monthly tops.

Gold built on its intraday positive move and shot to near one-week tops, around the $1855 region during the early North American session.

A combination of supporting factors assisted the precious metal to catch some fresh bids on Tuesday and stage a goodish bounce from near two-week lows set in the previous session. Despite the rollout of COVID-19 vaccines, investors remain concerned about the continuous surge in new coronavirus cases. This, along with the imposition of fresh restrictions, benefitted traditional safe-haven assets and provided a goodish lift to gold.

Meanwhile, the latest leg of a sudden uptick over the past hour or so could further be attributed to a softer tone surrounding the US dollar, which tends to benefit the dollar-denominated commodity. In fact, the USD Index remained depressed near two-and-half-year lows amid expectations for additional US fiscal stimulus. This was seen as another factor driving flows towards the non-yielding yellow metal and remained supportive of the move up. 

Meanwhile, the US Food and Drug Administration reportedly intends to grant emergency authorization for the use of a vaccine made by Moderna. The positive development boosted investors confidence, which was evident from a fresh leg in the equity markets and reinforced by a pickup in the US Treasury bond yields. This might turn out to be a key factor capping any further gains for the XAU/USD ahead of the FOMC policy meeting, starting this Tuesday.

That said, a sustained move beyond the $1848-50 supply zone might have already set the stage for additional gains. Hence, some follow-through strength towards the $1860 intermediate resistance, en-route monthly swing highs near the $1875 region, remains a distinct possibility.

Technical levels to watch