- Gold attracted some dip-buying near the $1867-66 region and turned positive in the last hour.
- Sliding US bond yields, approval of US stimulus package extended some support to the metal.
- COVID-19 jitters, stronger US GDP print benefitted the USD and might cap gains for XAU/USD.
Gold reversed an intraday dip to the $1867-66 region and might now be headed back towards the top end of its daily trading range. The commodity was last seen hovering around the $1879-80 region, up around 0.10% for the day.
The discovery of a new coronavirus strain and the imposition of strict lockdowns/travel restrictions in the UK continue benefitting the US dollar’s status as the global reserve currency status. This, in turn, was seen as a key factor that exerted some pressure on the dollar-denominated commodity.
The USD stood tall after the US GDP print for the third quarter was revised higher to show that the economy expanded by 33.4% annualized pace as against 33.1% estimated. That said, the approval of a long-awaited US stimulus package kept a lid on any further gains for the greenback.
The US Congress passed a long-awaited $892 billion coronavirus aid package on Monday, alongside a $1.4 trillion measure to keep the government funded for another year. The bill is now under review by the Senate and will become law once passed and signed by the US President Donald Trump.
Adding to this, a weaker tone surrounding the US Treasury bond yields assisted the non-yielding yellow metal to attract some buying. It, however, remains to be seen if the commodity is able to capitalize on the move or continue with its struggle to find acceptance above the $1900 mark.
Tuesday’s US economic docket also features the release of Richmond Manufacturing Index, Conference Board’s Consumer Confidence Index and Existing Home Sales. The data is unlikely to provide any meaningful impetus as the focus remains on developments surrounding coronavirus saga.
Technical levels to watch
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