Gold Price Analysis: XAU/USD recovers from intraday low, still mildly offered under $1,730

• Gold bounces off $1,722.82 amid fresh wave of risk aversion.
• Trading sentiment turns sour as fears of coronavirus wave 2.0 outweigh hopes of economic recovery, Fed’s support.
• Geopolitical tensions in Asia also play roles to ward off the US dollar’s recovery moves.

Gold prices rise to $1,727, down 0.05% on a day, while heading into the European open on Wednesday. The bullion earlier slumped to $1,722.82, as taking clues from the greenback’s extended gains, but recovered afterward as market mood sours amid fears of the coronavirus (COVID-19) resurgence.

Beijing takes extra steps in barring air travels and practicing lockdown as a total of 557 people have recently been infected due to the deadly virus. Not only the Chinese capital, numbers from Japan, the US and Germany also increases the odds of pandemic wave 2.0. Elsewhere, the India-China tussle and tensions between North Korea and South Korea exert additional burden on the risk-off momentum.

As a result, the US 10-year Treasury yields drop 2.3 basis points to 0.731% while Japan’s Nikkei 225 and US stock futures print mild losses as we write.

Even so, the buyers are probed by the US dollar’s recovery moves following Tuesday’s upbeat US retail sales figures. Also questioning the bullion’s upside could be the promising results of the UK’s second vaccine tests.

That said, the traders will keep eyes on the virus updates for fresh impetus while the geopolitical news from Asia might offer additional hints.

Technical analysis

Unless declining below 50-day SMA level of $1,714, the precious metal becomes eligible to challenge the lower high formation. In doing so, it needs to cross $1,733 to aim for $1,745 near-term strong resistance.