- Gold regained traction on Friday and recovered a part of the overnight slide to weekly lows.
- The emergence of some fresh selling around the USD extended some support to the metal.
- A positive tone around the equity markets might cap any strong gains for the commodity.
Gold edged higher through the early European session and moved back above the $1910 level, or fresh daily tops in the last hour.
The precious metal managed to regain some positive traction on the last trading day of the week and moved away from weekly lows, around the $1895 region touched in the previous session. The uptick was exclusively sponsored by the emergence of some fresh selling around the US dollar, which tends to benefit the dollar-denominated commodity.
Despite the slow progress in the US stimulus talks, investors remain optimistic that lawmakers will reach an agreement over the next round of fiscal aid. The US House of Representatives speaker Nancy Pelosi reported on Thursday that a deal would be reached pretty soon and said that progress was being made in talks with the Trump administration.
This comes on the back of news of the first approved treatment for the highly contagious coronavirus disease, which boosted investors’ confidence and dented the greenback’s status as the global reserve currency. However, a slight improvement in the global risk sentiment might undermine the precious metal’s safe-haven demand and capped the upside.
The risk-on flow was further evident from a modest uptick in the US Treasury bond yields, which might further contribute towards keeping a lid on any runaway rally for the non-yielding yellow metal, at least for the time being. This makes it prudent to wait for some follow-through buying before positioning for any further appreciating move.
From a technical perspective, the emergence of some dip-buying below the $1900 mark favours bullish traders. Hence, a subsequent positive move beyond the $1920 level, en-route the next major hurdle near the $1931-33 supply zone, looks a distinct possibility.
Technical levels to watch