Stricter restrictions being imposed in the US and Europe keep prices buoyed amid rising economic concerns

Gold prices have steadied these days following a massive sell-off seen at the start of the week. the precious metal finished marginally higher on Thursday, retaining a slight bullish bias at the end of the trading week. The bullion has been capped by the $1,890 region since Monday, with limited recovery attempts imply that bearish risks persist at least in the short term.

The downside pressure surrounding gold prices has eased amid a weaker USD index that is adding to yesterday’s losses below the 93.00 figure as traders positioning for the upcoming economic updates out of the United States. The producer price index and investor confidence data are due later today.

On the positive side, open interest in gold futures rose for a second consecutive session on Thursday, suggesting the metal could edge higher and retarget the $1,900 handle, followed by the 100-DMA ($1,904) if the greenback remains on the defensive in the very near-term.

In a wider picture, rising coronavirus infections globally and stricter restrictions being imposed in the US and Europe keep gold prices relatively buoyed amid rising economic concerns. As cases continue to rise globally, the economic outlook is getting worse further, which is positive for the safe-haven gold in the longer-term.

From the technical point of view, however, the longer the yellow metal stays below the mentioned $1,900 handle and the key moving averages around this level, the higher the bearish risks are getting. The inability to regain the $1,890 mark could lead to a retreat, with the initial target arriving at $1,870, followed by $1,860 and Monday’s lows in the $1,850 area.

Despite the recent recovery, the weekly RSI continues to point south as the prices remain well below the levels registered at the start of the trading week around $1,965. Furthermore, the bullion stays below the 20-weekly MA, today at $1,908. In short, gold needs a stronger momentum to recoup recent losses and switch into a short-term bullish trend.

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