Gold rallies further beyond $1835 level, fresh multi-year tops
- Gold continues gaining traction amid expectations of more stimulus from the US.
- The offered tone surrounding the USD remained supportive of the positive move.
- Bulls seemed rather unaffected by the optimism over a potential COVID-19 vaccine.
Gold built on its steady intraday positive move and continued scaling new multi-year tops through the mid-European session on Tuesday.
Currently hovering around the $1835-36 region, the momentum was sponsored by expectations of more fiscal stimulus measures from the US to mitigate the economic impact of the coronavirus pandemic. It is worth reporting that a debate over a further round of economic stimulus measures is currently underway in the US Congress.
This comes on the back of the latest development, wherein the European Union ministers finally reached agreement on an unprecedented €750 billion coronavirus recovery fund. The package, aimed at aiding the region’s worst-hit economies, was seen as one of the key factors that provided a strong lift to the non-yielding yellow metal.
Adding to this, the prevalent offered tone surrounding the US dollar further benefitted the dollar-denominated commodity and remained supportive of the ongoing strong move to nine-year tops. The ever-increasing coronavirus cases in the US fueled concerns that the economic recovery will take much longer than expected kept the USD bulls on the defensive.
Bulls traders seemed rather unaffected by the upbeat market mood, which tends to undermine demand for traditional safe-haven assets, including gold. The global risk sentiment remained well supported by the latest optimism over a potential vaccine for the highly contagious disease.
Meanwhile, technical indicators on short-term charts are already flashing overbought conditions and warrant some caution before placing fresh bullish bets. Hence, a modest pullback, possibly on the back of some profit-taking, or a near-term consolidation cannot be ruled out.
Technical levels to watch