Gold Price Analysis: XAU/USD wavers around $1,860 amid quiet session

• Gold prices cools down the previous day’s upside momentum.
• Traders consolidate gains amid a light calendar in Asia, US stimulus jitters.
• Market frenzy, risk catalysts keep the driver’s seat, silver’s move should be watched too.

Gold consolidates the strong up-moves in two weeks around $1,860 during Tuesday’s Asian session. The yellow metal tracked silver to the north during the previous day amid a retail rush while paying a little heed to the US dollar’s strength, which generally challenges the bullion buyers.

The yellow metal’s latest pullback could be traced from uncertainty surrounding the US coronavirus (COVID-19) fiscal stimulus package as well as the CME margin hike on silver.

Although US President Joe Biden is firm on his $1.9 trillion aid package, Republicans show readiness to block the much-awaited relief while offering nearly $600 billion of a bundle. CME raises margin requirements for silver by 17.8% after Monday’s stellar run-up. Following the news, Ausbiztv’s David Scutt raise doubts on silver’s further run-up while tweeting, “While 7% isn’t anything to dismiss, Monday’s silver-squeeze was only the largest daily gain since August. The 13.6% gain over the past 3 sessions was also surpassed on several occasions last year. Doubt the move will last.”

Also challenging the moves could be a lack of major data/events as well as traders’ cautious sentiment ahead of the Reserve Bank of Australia’s (RBA) monetary policy meeting. Although the RBA is expected to stand pat, hopes of witnessing signals to further quantitative easing (QE) and fears of inflation slowing can’t be ruled out.

Against this backdrop, S&P 500 Futures gain 0.15% after Wall Street benchmarks gained notably the previous day. Further, the US 10-year Treasury yields extend Monday’s drop with 0.7 basis points (bps) to 1.08% by press time.

Looking forward, gold traders will keep their eyes on silver’s next move while also following US stimulus and the covid vaccine headlines for fresh direction.

Technical analysis

Although an ascending trend line from January 18 restricts gold’s short-term downside around $1,845, bulls are less likely to be convinced unless witnessing a clear break of 100-day SMA near $1,876.