Gold Price Analysis: XAU/USD gears up for $1,800, Biden’s ‘Joint Congress’ in focus
- Gold stays on the front foot, keeps Fed-led gains near the weekly top.
- Fed reiterated cautious optimism, Powell rejects tapering talks.
- Mixed updates over covid, vaccine and stimulus trouble bulls.
- Biden’s first speech to join Congress, US Q1 GDP will be the key.
Gold buyers extend post-Fed gains to $1,783, up 0.10% intraday, during the initial Asian session on Thursday. The US Federal Reserve’s (Fed) moves, actually inaction, dragged down the greenback and backed the bright metals heaviest jump in a week the previous day. The quote’s latest moves seem to take clues from the cautious optimism concerning US President Joe Biden’s speech.
After Fed, Biden and US GDP are in focus…
Fed matched the wide market forecast of another status-quo during Wednesday. Even so, the US central bank praised economic recovery to keep buyers hopeful. It should, however, be noted that the US dollar index (DXY) dropped heavily afterward as Fed’s Powell said, “It’s not the right time” to talk tapering.
Elsewhere, the coronavirus (COVID-19) woes are gaining momentum in Asia while the uneven vaccinations in the West and fresh doubts over the AstraZeneca vaccine add to the market fears.
Against this backdrop, Wall Street benchmarks and the US 10-year Treasury yield flashed mild losses by the end of Wednesday whereas DXY refreshed a two-month low. Even so, the S&P 500 Futures rise 0.06% by the press time.
Moving on, US President Biden’s speech at 01:00 GMT will be the key amid multiple barriers to tax hike and a $4.0 trillion stimulus proposal. Following that, the preliminary readings of US Q1 GDP will be the key. Above all, risk catalysts comprising the covid and vaccine updates, as well as geopolitical news, keep the driver’s seat.
Technical analysis
Although the weekly falling trend channel keeps gold sellers hopeful, the patterns support line near $1,760 can offer intermediate bounces. It should, however, be noted that the quote’s sustained run-up beyond the key hurdle around $1,786-88, comprising the upper line of the stated channel and the previous support line from March, should dampen the bearish sentiment, mainly portrayed by downbeat MACD and Momentum indicators.