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  • XAU/USD extended gains and hit a fresh two-day high at $1880.
  • Gold heads for lowest weekly close since September.

Gold jumped from $1,867 to $1,880/oz, reaching the highest level in two days. From the top pulled back and as of writing, the metal trades at $1,875, up by $10 for the day but still down for the week.

XAU/USD is about to post the lowest weekly close since September, holding firm under the 20-week moving average. It continues to test the key support around $1,850 that if broken should clear the way to more losses and probably to an increase in volatility.

The weaker US dollar and higher equity prices did not help gold during the week. Neither did lower US yields.

Optimism about the coronavirus vaccine and technicals could be seen as a key reason for the bearish bias in the metal. Next week will be the preview of a busy December with rising expectations about more fiscal and monetary stimulus from central banks that could limit losses in gold or even boost the metal.

The key level in XAU/USD on the downside is the $1,850 area and to the upside, a strong resistance is seen at $1,930; a break above $1,960 should clear the way for a return to $2,000.

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