Gold Price Analysis: XAU/USD holds steady near $1,790 level, bullish potential intact
- Gold consolidated its recent strong gains to the $1,800 neighbourhood, or near two-month tops.
- Fresh COVID-19 jitters, sliding US bond yields, weaker USD support prospects for additional gains.
Gold remained confined in a narrow trading band through the early European session and consolidated its recent gains to the $1,800 neighbourhood, or near two-month tops.
The precious metal struggled to capitalize on the previous day's strong move up and witnessed a subdued/range-bound price action through the first half of the trading action on Thursday. That said, the near-term bias remains tilted in favour of bullish traders and supports prospects for additional gains.
The US dollar languished near multi-week lows amid diminishing odds for an earlier than anticipated Fed lift-off and might lend some support to the dollar-denominated commodity. The greenback was further pressured by declining US Treasury bond yields, which tends to benefit the non-yielding yellow metal.
Meanwhile, fears about another dangerous wave of COVID-19 infections continued weighing on investors' sentiment and was evident from the prevalent cautious mood around the equity markets. This was seen as another factor that should act as a tailwind for the safe-haven XAU/USD, reaffirming the constructive outlook.
Even from a technical perspective, last week's move beyond the $1,760-65 region validated a double-bottom bullish breakout. Hence, a subsequent move beyond the $1,800 mark will be seen as a fresh trigger for bullish traders and push the XAU/USD further towards the next major hurdle near the $1,818-19 region.
Technical levels to watch