At the same time, the precious metal refrains from deeper losses
Gold prices have been struggling these days amid the persistent dollar strength as the Fed debates tapering asset purchases. The bullion has settled around the 20-DMA this week, staying below the $1,800 figure that represents the immediate target for bulls.
At the same time, the precious metal refrains from deeper losses as global stocks and risky assets in general stay under pressure amid a combination of the Delta virus spread across the globe and a more hawkish tone from the Federal Reserve. Also on the positive side, physical demand for gold is recovering in China as well as India.
The yellow metal has settled within a limited trading range, struggling to overcome the 20-DMA which in turn represents a barrier on the way towards the $1,800 mark. On the downside, this week’s lows around $1,770 act as the key support zone at this stage. As long as the prices stay above this level, downside risks are limited. The XAUUSD pair was last seen changing hands just below $1,783, nearly unchanged for the day.
In a wider picture, the outlook for gold looks neutral as the prices are now stuck between the 20- and 100-week SMAs which arrive at $1,809 and $1,750, respectively. in general, the bullion looks relatively steady following a brief plunge to mid-2020 lows last week.
Meanwhile, the USD index surged to fresh 2021 highs earlier today before a slight pullback pushed the greenback marginally lower. However, the persistent risk-off tone helped the dollar regain upside momentum during the European hours, and it looks like the index would stay on the offensive in the short term as traders continue to digest more hawkish rhetoric from the US central bank.