XAU/USD hangs at 100DMA ahead of US data

Gold prices have remained steady so far in Asian trading on Wednesday, hovering around the daily moving average (DMA). The shiny metal lacks a clear direction, in the absence of a new catalyst, as attention now turns to US CB consumer confidence data for more impetus. Persistent concerns about the rise of Omicron covid variants in Europe, Australia and the UK continue to emerge amid a diminishing market situation over the holidays. Technically, gold prices remain confined between the major DMAs, with the 14-day Relative Strength Index (RSI) still hovering at 50.00, showing the acumen of gold traders.

Gold (XAU/USD) remains slightly offered around $1,790, up for the second day in a row during Wednesday’s Asian session. Even so, the metal has not kept up with other risk barometers, such as Antipodeans and WTI, in depicting the mood at risk. The reason could be related to the cautious market sentiment ahead of the US data series as well as the bearish chart trend.

The refusal by global policymakers of lockdown measures ahead of the Christmas holidays, despite the latest spread of the covid variant in South Africa, known as Omicron, seems to have boosted sentiment. . US President Joe Biden’s expectations for the completion of the “Build Back Better (BBB)” plan and vaccine/treatment optimism are also positive for gold.

Although Texas reported its first Omicron-related death in the United States, President Joe Biden curtailed any nationwide embargo, as previously revealed, while promoting vaccination faster. Similarly, cautious optimism emanates from the Pacific countries and the United Kingdom. In addition, news that the US Food and Drug Administration (FDA) will allow a duo of drugs Pfizer and Merck to treat Covid19 earlier this week, according to Bloomberg sources, also added to the increase mood at risk.

In addition, “President Biden said Tuesday that he believes there is still room to achieve his Better Build Back program, despite Senator Joe Manchin’s opposition to the spending bill social and climate goals,” said The Hill.  In contrast, inflation expectations rose in the United States, as measured by the 10-year breakeven inflation point according to data from the Federal Reserve of St. Louis (FRED), ahead of key US data from this week challenges gold buyers. In addition, the struggles between China-US and the US-Russia add to the downward trend in gold prices.

That said,  US Treasury yields rose 4.8 basis points (bps) to 1.467 percent, while Wall Street benchmarks recorded a three-day downtrend in late Tuesday trading. of America. However, the S&P 500 Futures index is down 0.10% on the day at press time.

Moving on, gold traders could reassess the latest level of market optimism despite Omicron woes and firmer inflation expectations ahead of US data.