Gold Price Analysis: XAU/USD wavers around $1,800 as mixed clues probe two-month high

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  • Gold consolidates the heaviest gains in a week inside a small trading range.
  • Updates concerning the covid, geopolitics test BOC-led bulls amid a quiet Asian session.
  • All eyes on the ECB, risk catalysts while US, Aussie data may offer intermediate moves.

Gold prices seesaw around $1,794, after rising to the highest since February 25, during the initial Asian session on Thursday. The yellow metal rose for the second consecutive day, recently struggling, during Wednesday’s rise to the multi-day top. The Bank of Canada’s (BOC) tapering gained the bull’s attention but recent challenges to the risk, mainly from the coronavirus (COVID-19), geopolitics and fiscal fronts test the upside ahead of the key European Central Bank (ECB) meeting.

Market optimism has a bumpy road ahead…

Although the BOC’s 25% reduction in the weekly bond purchases wooed traders on Wednesday, it couldn’t be considered an early signal for other major central banks like the Fed and the ECB. The reason could be spotted from the different economic matrix and the size of the catalysts weighing the move.

Also, worsening covid conditions in Asia join recent geopolitical and trade jitters concerning the US, China, Australia and Russia to test the risk-on mood. Furthermore, the deadlock over the US infrastructure spending bill and doubts relating to the need for a third jab, not to forget the pre-ECB cautious mood, offer extra filters to the market sentiment.

Read: Fresh Aussie-China tussle, US infrastructure spending bill talks and covid woes can weigh on sentiment

Against this backdrop, S&P 500 Futures part ways from the Wall Street benchmarks while beginning Thursday on soft footing.

Moving on, traders will pay attention to the ECB’s press conference for fresh impulse as the bloc’s central bank isn’t expected to offer any change in the key rates and bond purchases. Also important on the economic calendar will be the US weekly Jobless Claims, Chicago Fed National Activity Index and Existing Home Sales figures. Above all, risk catalysts and earnings should be followed closely for fresh impulse.

Technical analysis

The first daily closing beyond 100-day EMA, around $1,788 by the press time, since January enables gold buyers to cross the $1,800 immediate hurdle and aim for late February tops near $1,817. It should, additionally, be noted that 200-day EMA near $1,793 can offer adjacent support during the pullback moves.

 

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