Gold Price Analysis: XAU/USD picking up bids above $1,950 amid risk reset
- Gold prices keep recoveries from $1,907 to stay past-$1,950.
- Fed’s extension of stimulus measures, no US fiscal package insight and coronavirus crisis keep the bullion strong.
- The pre-Fed trading lull might bore the bulls, except for some entertainment from second-tier data, risk catalysts.
Gold prices rise to $1,961.50 during the pre-Tokyo open Asian trading on Wednesday. The yellow metal refreshed the record high to $1,981.34 the previous day. However, the US dollar pullback from near two-year low pulled the quote back to $1,907, before portraying a bounce towards $1,950.
Bulls keep the reins…
Be it the renewed uncertainty surrounding the US fiscal package or the coronavirus (COVID-19) crisis, not to forget mixed American data, the Gold buyer has many things to cheer despite the previous day’s mild pullback. The US Senate members are still apart on phase 4 COVID-19 bill despite the upcoming expiration of unemployment claim benefits. Recent updates from the House Speaker Nancy Pelosi and the White House Chief of Staff Mark Meadows indicate the difference between the Republicans and Democrats over the much-awaited stimulus.
The political backlog joins the faster run of the new cases beyond 4.0 million and mixed economics to confuse the policymakers and markets. The same supersedes the Federal Reserve’s (Fed) announcement of extending the lending facilities that were scheduled to expire on or around September till the year-end.
It should also be noted that US President Donald Trump tries hard to cheer markets with vaccine hopes but has failed so far amid doubts over his victory in the November month’s US elections.
Amid all these plays, Wall Street S&P 500 Futures flash 0.10% gains despite a downbeat performance by Wall Street benchmarks and the US 10-year Treasury yields.
Market players are likely to witness a mild reduction in the liquidity ahead of the US Fed meeting. Even if the policymakers aren’t expected to offer any surprises, the anticipated bearish tone of Chairman Jerome Powell becomes the key for the event watchers.
Technical analysis
A daily closing below the previous record of $1,921 becomes necessary for the bears to aim for $1,900. Until then, the bullion buyers can keep $2,000 on the radars.