Gold has been rising recently amid COVID-19 fears affecting the global markets. On May 19, gold edged higher in the early North American trading session. The precious metal was last seen trading near the top end of the daily trading range around the $1,740 zone. It regained some positive traction amid sustained USD selling.
After the May 18 sharp pullback from the multi-year tops, the haven metal managed to regain some of its lost value. This uptick was allegedly supported by the growing US dollar selling bias, although it lacked any secure follow-through buying.
The US dollar retreated further from its three-week tops set on May 15. It was then pressured by a modest pullback within the US Treasury bond yields. This factor together with concerns over the growing tension between the US and China, which extended some support to the dollar-denominated commodity.
Nevertheless, the encouraging data on the COVID-19 vaccine trial added to the recent optimism over the gradual re-opening of economies around the world. In its parts, this may undermine the precious metal’s considered safe-haven demand and maintain a lid on any substantial gains.
Apart from all that, investors appeared reluctant to place any aggressive bets; they preferred to wait on the sidelines until the Fed Chair Jerome Powell‘s congressional testimony. Powell’s comments will be closely reviewed for any clues and signs about the future policy path. That will play a significant role in determining the next phase of a directional move for the non-yielding precious yellow metal.
The markets are still unsettled with the stocks and fiat markets remaining highly volatile in recent weeks. However, analysts think that gold will soon head toward the $1,800 levels.