Gold Price Analysis: XAU/USD retreats to $1,900 area, gains more than $10
- Gold has gone into a consolidation phase after rising above $1,910.
- Market mood turns sour on latest headlines on US stimulus talks.
- US Dollar Index remains on track to close in the negative territory.
The troy ounce of the precious metal dropped to its lowest level in nearly a week at $1,882 on Wednesday but staged a decisive rebound in the second half of the day. After climbing to a daily high of 1,913, the XAU/USD pair has gone into a consolidation phase and was last seen gaining 0.65% on the day at $1,903.70.
USD recovers modestly on safe-haven flows
Earlier in the day, the broad-based selling pressure surrounding the greenback helped XAU/USD push higher. However, the latest headlines surrounding the coronavirus relief bill negotiations in the US caused Wall Street's main indexes to turn red and helped the USD limit its losses.
US Treasury Secretary Mnuchin said on Wednesday that it was not going to be easy to reach a deal with Democrats before the presidential election despite the fact that they have been making progress on certain issues.
Reflecting the cautious market mood, major equity indexes in the US are down between 0.6% and 1.1%. Meanwhile, the US Dollar Index, which touched a daily low of 92.25, is losing 0.2% at 93.35.
There won't be any significant macroeconomic data releases in the remainder of the day and the USD's market valuation is likely to continue to impact the pair's movements.
Technical levels to watch for