Gold clings to modest gains near $1930 level, lacks follow-through
- The prevalent offered tone surrounding the USD assisted gold to regain traction on Thursday.
- A fresh leg down in the US bond yields provided an additional boost to the non-yielding metal.
- The latest optimism over a potential vaccine for COVID-19 might keep a lid on any strong gains.
Gold edged higher during the Asian session on Thursday, albeit lacked any strong follow-through and remained well with the previous day's broader trading range.
Following the previous day's good two-way price swings, the precious metal managed to regain some positive traction and was being supported by a weaker US dollar. The impasse over the next round of the US fiscal stimulus measures continued exerting some pressure on the greenback, which, in turn, was seen as a key factor lending support to the dollar-denominated commodity.
This, coupled with a mildly cautious tone around the equity markets and fresh leg down in the US Treasury bond yields provided an additional boost to the non-yielding yellow metal. However, the latest optimism over a potential vaccine for the highly contagious coronavirus diseases kept a lid on any strong gains for the precious metal, at least for the time being.
Russia announcing that the first batch of its COVID-19 vaccine Sputnik-V would be ready for some medics within two weeks. Adding to this, expectations that the US lawmakers will eventually reach a consensus on the stimulus measures might hold investors from placing aggressive USD bearish bets. This should further contribute towards capping the upside for the commodity.
Investors might also refrain from positioning for the commodity's next leg of a directional move ahead of a crucial weekend meeting between the US and Chinese trade officials. This could lead to a subdued/range-bound trading action around the commodity as investors now look forward to the release of the US Initial Weekly Jobless Claims for some trading impetus.
Technical levels to watch