Gold Price Analysis — February 3

Gold Price Analysis — February 3

Gold (XAU/USD) struggled to sustain its goodish uptick from yesterday and has renewed its daily low of around $1832 in the early European session on Wednesday.

The prevalent risk-on market mood was mostly responsible for the scarcity of demand around gold, which capped any additional gains for it. Also, the pickup in the US Treasury bond yields exerted extra pressure on the non-yielding metal.

The global market risk sentiment got a boost as Democrats in the US Congress took their first steps towards implementing President Joe Biden’s proposed $1.9 trillion stimulus package. The Dems invoked a legislative tool that allows them to bypass Republicans, who strongly opposed the massive stimulus amount.

Furthermore, the market mood got additional bolstering after a recent report showed that the Sputnik V coronavirus vaccine developed in Russia posted a 91.6% effectiveness rate in the phase-three trial. The news lifted optimism for a rapid global economic recovery and boosted risk-on flows, which tends to undermine demand for traditional safe-haven assets.

Moving on, market participants will be looking at the US economic docket today—which features the US ISM Services PMI release—for clues. Traders will also be taking market clues from the broader market risk sentiment, US stimulus headlines, and US bond yield movements.

XAUUSD – 4-Hour Chart

Gold (XAU) Value Forecast — February 3

XAU/USD Major Bias: Sideways

Supply Levels: $1850, $1860, and $1875

Demand Levels: $1827, $1818, and $1808

Gold continues to trade in a directionless pattern between $1875 and $1832 for the thirteenth consecutive session. The metal needs to post strong gains above the $1875 crucial resistance to validate a bullish bias or a sustained fall below the $1827 support to confirm a bearish bias.

Until a breakout in either direction is spotted, the commodity will likely continue on a sideways momentum. That said, we expect a retest of the $1875 resistance once again in the coming hours and days.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.