XAU/USD upholds with modest gains

Foto

Gold traded with a mild positive bias through the early European session, albeit lacked any strong follow-through buying. The commodity was last seen hovering around the $1880-79 region, up around 0.10% for the day.

Following the previous day’s rejection slide from the $1900 mark, the precious metal regained positive traction on Tuesday and was being supported by progress on additional US stimulus measures. The House of Representatives voted in favour of increasing the amount of COVID-19 relief payments to qualified Americans from $600 to $2,000 on Monday. This, in turn, weighed on the greenback and was seen as a key factor that benefitted the dollar-denominated commodity.

The already upbeat market mood got an additional boost after the lawmakers pushed forward with an enhanced COVID-19 relief package. Meanwhile, the euphoria over Brexit agreement before the end of transition period seemed to have faded amid concerns about the non-inclusion of the crucial services sector in the accord. Nothing has been agreed on financial markets, which could be a big negative for the UK and in turn, weigh on the British pound.

From a technical perspective, the XAU/USD, so far, has managed to defend a two-week-old ascending trend-line. The mentioned support is currently pegged near the $1872 region. A convincing break below might prompt some technical selling and drag the commodity to the $1855 support zone. This is closely followed by static support near the $1850-48 region, which should act as a strong base for the metal and a key pivotal point for the next leg of a directional move.