Gold (XAU/USD) started out the week on the back foot and closed Monday below $1930, extending Friday’s weakness. The spot once again failed to sustain above the $1950 level, as the coronavirus vaccine optimism lifted the risk sentiment and dulled the haven appeal of gold. Wall Street closed at record highs while the rally in the US Treasury yields prompted the US to stage a solid comeback across the board. Markets cheered the US Food and Drug Administration’s authorization of the use of blood plasma from recovered COVID-19 patients as a treatment option. The vaccine hopes offset the concerns over the virus resurgence in Europe.
Gold is showing some signs of life in Tuesday’s trading so far, as the greenback eased broadly amid a risk-on market environment. The overnight optimism got a further boost from the US-China ‘constructive’ talks on phase one trade agreement. The yellow metal’s upside attempts appear limited, as the risk-on action on the global markets could weigh on the metal. Gold also remains at the risk of the dollar replicating Monday’s comeback moves, in light of the rally in the Treasury yields. Markets will closely watch out for fresh US-China trade developments and US CB Consumer Confidence data for fresh trading impetus. The main highlight for this week remains the Fed Chair Powell’s appearance at the Jackson Hole Symposium.