If the greenback climbs later today, gold prices may extend losses to the $1,790 area
Gold prices have been losing ground for the third day in a row on Thursday to register 1.5-week lows around $1,792 earlier in the day. The precious metal failed to hold above the $1,800 threshold as a renewed risk-on wave has gripped global markets.
It looks like investors shrugged off pandemic-related worries, at least for the time being, to focus on upbeat corporate earnings and positive expectations on the economic recovery. However, traders remain cautious amid rising coronavirus cases in some parts of the world.
Of note, the bullion struggled to regain upside momentum despite dollar demand has eased amid the prevailing risk-on trends ahead of the ECB meeting due later today. US government bond yields were sharply up, also signaling decreased demand for safe-haven assets. Yields climbed due partly to positive corporate earnings.
The ECB is widely expected to maintain its monetary policy unchanged. At the same time, there is a general perception that policymakers will maintain a dovish stance. In this scenario, the euro would resume the decline and support the greenback. If the dollar climbs later today, gold prices may extend losses to the $1,790 area, followed by $1,784. Later in the day, the US weekly jobless claims and housing data will be closely followed as well.
On the weekly charts, the precious metal is clinging to the 20-SMA that arrives just below the $1,800 figure. A daily and weekly close below this moving average would signal some deterioration in the medium-term technical picture. On the upside, the immediate upside barrier arrives at $1,810, followed by the 200-DMA that arrives at $1,823 today.