- Gold sellers continue to lurk just above $1925.
- US dollar remains buoyed by discouraging vaccine news.
- Eyes on US CPI report and sentiment on Wall Street.
Gold (XAU/USD) has taken a U-turn once again from near $1925 levels, as the recovery rally from two-day lows of $1910 falters amid persistent strength seen in the US dollar across its main competitors.
The bright metal continues to closely follow the US dollar price action, as the market sentiment remains tepid amid rising coronavirus cases globally and on reports that a vaccine trial by Johnson and Johnson has been paused due to some unexplained side-effect.
However, the downside remains cushioned in the spot, thanks to the sell-off in the US Treasury yields across the curve. Concerns about the US economic recovery weigh on the US rates, especially in light of a likely delay in the fiscal stimulus package.
In the session ahead, gold bulls could regain the recovery momentum if the US stocks extend Monday’s rally, diminishing the dollar’s safe-haven appeal. Also, of note remains the US CPI release for gold traders.
XAU/USD: Technical levels
Further up, the convergence of the daily high and SMA10 four-hour at $1925 will cap the recovery attempt. Strong resistance at $1932, the previous week high, will be the level to beat for the bulls. Alternatively, a break below the $1911 (previous low four-hour) support is needed for the sellers to challenge the critical downside target of $1904 (Fibonacci 38.2% one-month).
XAU/USD: Additional levels
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