Gold managed to rise higher in the early European trading hours and managing to move back above the $1910 psychological level. That is a fresh daily top in the past two hours. The yellow metal managed to regain some of the positive traction on the last day of trading this week.
Notably, the precious metal has moved away from the weekly lows located near the $1895 zone which it flirted with in the past session. That uptick was primarily underpinned by the emergence of some fresh selling around the US dollar, which tends to benefit the dollar-denominated commodity.
Despite the painfully slow progress in the United States stimulus talks, the investors remain optimistic that the lawmakers will reach an agreement in the next round of fiscal aid. Nancy Pelosi, the US House of Representatives speaker, said on October 22 that a deal would be reached quite soon and added that progress was being made in the talks with the Trump administration.
The announcement comes on the back of the news of the first approved treatment for the highly contagious COVID-19. That news enhanced investors’ confidence and, in turn, dented the dollar’s status as the global reserve currency. Nevertheless, a small improvement that came up in the global risk sentiment may undermine gold’s haven demand and capped the upside momentum.
Interestingly, the risk-on flow was also evident from a mild uptick in the United States Treasury bond yields that might also contribute towards putting a lid on any form of runaway rally for the non-yielding gold, for now. It is, therefore, wise to wait for some form of follow-through buying before positioning more appreciating moves.
Based on a technical perspective, the arising of some dip-buying below the $1900 level favors bullish traders. Thus, another positive move beyond the $1920 zone opens up the door for the gold market to test the next significant hurdle that has formed around the $1931-33 supply zone.