The bullion still could capitalize on global uncertainty caused by several risk factors
Gold prices struggle to see a more sustainable upside momentum these days despite the dominating risk aversion across the global financial markets. At the same time, the precious metal refrains from deeper corrections, still being supported by the 100-DMA that has been acting ad support since March. On Friday, the bullion looks directionless, trying to settle above the $1,900 psychological handle.
Despite the recent recovery, gold finishes the trading weak in the red, with the short-term technical outlook for the metal remaining subdued. However, in the longer run, the bullion still could capitalize on global uncertainty caused by several risk factors including the ongoing coronavirus pandemic that is threatening the economic recovery globally amid a second wave. Brexit developments, US elections, and geopolitics add to global uncertainty as well.
At this stage, the emergence of fresh selling around the greenback helped the dollar-denominated commodity to move back into the positive territory. On the other hand, some recovery in risk demand on Friday caps the recovery momentum in the gold market at the moment.
From the technical point of view, the yellow metal needs to hold above the 20-DMA in the short term in order to make further recovery attempts. The daily RSI is directionless, suggesting the prices could stay in a consolidative mode before deciding on the further direction.
In the longer term, the bullion could regain a stronger upside momentum and regain the $2,000 figure last seen nearly two months ago. Furthermore, the prices could jump to fresh all-time highs and exceed the $2,100 level as early as in the first quarter of 2021 as the global economy will continue to struggle amid the pandemic. On the downside, the outlook for gold will deteriorate if the prices fail to hold above the mentioned 100-daily moving average that now arrives at $1,871 and capped bearish attempts late last month.