The US stock index futures have settled in the green along with major European indexes
Gold prices retain a bearish bias on Tuesday, with the bullion staying within a limited trading range these days. The precious metal extends the retreat for the fourth day in a row, flirting with the 200-DMA, a break below which could pave the way for deeper losses in the days to come.
The dollar pared earlier gains as market sentiment turned positive in recent trading following solid losses in Asia. The US stock index futures have settled in the green along with major European indexes, suggesting equities have already shrugged off recent weakness and target fresh record highs now.
Despite a retreat in the greenback, gold prices failed to attract demand as risk sentiment turned positive, capping demand for the safe0haven metal. Still, the downside pressure looks limited as there is still some uncertainty surrounding the pandemic and vaccination, the political situation in Italy, as well as US fiscal stimulus.
In the immediate term, the bullion needs to hold above the mentioned moving average that arrives at $1,846 while on the upside, the key barrier for bulls arrives at $1,872 where the 20-DMA lies. as long as the prices stay between these moving averages, the market looks directionless, with the daily RSI looking neutral at this stage. The XAUUSD pair was last seen at $1,849, down 0.37% on the day.
In a wider picture, the yellow metal extends its gradual retreat from all-time highs registered at $2,075 in August 2020. Now, as the prices have settled below the 20-weekly moving average, the longer-term technical outlook has deteriorated further. On the other hand, as the greenback stays within a broader bearish trend, the downside potential surrounding the bullion remains limited.
Later this week, the Federal Reserve policy meeting outcome could affect gold prices. If the central bank strikes a dovish tone, the dollar could come under additional pressure thus supporting the precious metal.