If the dollar comes back under the selling pressure, the bullion could overcome the key short-term hurdle
Gold prices turned marginally lower on Thursday following two days of gains. The precious metal has been trending north these days, targeting the 100-DMA that arrives just above the $1,800 key barrier. It looks like traders are getting more cautious as the prices are nearing this level. However, if the dollar comes back under the selling pressure, the bullion could overcome this hurdle by the end of the week.
The greenback looks steady today, with trading being fairly muted in most currency pairs. The downside pressure surrounding the safe-haven greenback has eased, but the USD struggles for direction despite US Treasury yields keep retreating from highs.
Later today, the European Central Bank is widely expected to maintain its current monetary policy settings. Should the bank deliver a cautious outlook on the economy, the sell-off in the Treasury yields could deepen. The US weekly jobless claims could affect gold prices through the greenback as well.
The near-term bias remains tilted in favor of gold bulls and supports prospects for additional gains as the dollar languishes near multi-week lows. Furthermore, fears about another wave of COVID-19 infections continue weighing on investors’ sentiment despite the current ascent in stock markets. This is seen as another factor that should give a lift to the safe-haven XAU/USD.
From the technical point of view, a decisive break above the mentioned moving average for the first time since early January would improve the picture substantially. However, the bulls may lack the momentum to challenge this resistance. In this scenario, a pullback towards the $1,760 initial bearish target should be expected. In a wider picture, the key support is represented by the 20-DMA that arrives at $1,744. In the immediate term, the XAUUSD pair will likely stay under pressure.
