Gold Price Analysis: XAU/USD struggles above $1,800 amid risk-on mood – FXStreet

  • Gold bulls catch a breather near the weekly top around $1,810.
  • US President Trump signed a bill to punish China for the Hong Kong security law.
  • Vaccine news, equity earnings keep the optimism alive.
  • BOJ, risk catalysts will be in the spotlight amid a light calendar.

Gold drops to $1,808.30 during the pre-Tokyo open Asian session on Wednesday. The bullion has so far remained in the positive territory during the week. Though, $1,807 to $1,811 area seems to restrict the quote’s immediate upside moves.

The safe-haven asset recently took clues from the market’s upbeat mood. While Wall Street’s performance offered initial push to the risk-on sentiment, increasing odds of the coronavirus (COVID-19) vaccine helped to extend the optimism. In doing so, the Sino-American tension and surge in the pandemic figures seem to have been ignored.

Bulls cheer nearness to virus cure, upbeat earnings…

In their latest earnings reports, the key US banks like JP Morgan and Citi portrayed the success of the government’s efforts to fuel the economy. The updates not only helped Wall Street to shrug off the previous day’s pessimism but propel the S&P 500 Futures to remain solid by the press time.

Also supporting the risk-on mood could be upbeat signals form Moderna and US President Donald Trump concerning the COVID-19 vaccine. While the leading pharmacy marked ‘robust’ results during the third round of trials, American President Trump also cited nearness to the cure.

On the contrary, the Sino-American tension gets heated as the US rolls out sanctions on diplomats from Beijing while also defying Hong Kong’s special treatment. Further portraying the tussle among the world’s top two economies are threats from the Republican leaders to China. Additionally, rising pandemic cases in Nevada, Los Angeles County and Texas, not to forget recent worries from Tokyo, keep the risk-on mood chained.

Against this backdrop, S&P 500 Futures prints 0.90% gains to 3,212 but the US 10-year Treasury yields await fresh clues to extend the latest recoveries beyond 0.62%.

Moving on, the Bank of Japan’s (BOJ) monetary policy meeting, at 0.3:00 GMT, could offer immediate direction while updates concerning the US-China story and the virus woes will also be the key to follow.

Technical analysis

Unless slipping below the month-start top near $1,790, bulls are less likely to forget aiming for the multi-year high of $1,818.17.