Gold is under pressure for the third straight day below $1900

Gold (XAU/USD) held well within Monday’s $1865-$1899 range on Tuesday, having faced rejection once again just below the $1900 level. The daily chart continues to warrant caution for the XAU bulls, painting a bearish picture in the near-term, as rising covid concerns weigh over the vaccine optimism, FXStreet’s Dhwani Mehta reports.

Key quotes

“Expectations of additional US fiscal and monetary stimulus remain alive and kicking, especially after Federal Reserve Chair Jerome Powell said the US economy still has a ‘long way to go’ before it fully recovers from the pandemic. Powell’s comments continue to exert downward pressure on the Treasury yields, putting a floor under the yieldless gold for the time being.”

“Intensifying concerns over the global coronavirus resurgence could deepen the risk-off mood going forward and lift the haven demand for the US dollar. Therefore, the upside attempts in the bullion could likely remain elusive while traders keep a close eye on the vaccine updates.”

“It's worth noting that the price trades below all the major short-term daily moving averages.”

“Only a daily closing above the 21-DMA at $1895 will negate the downside bias. The next relevant upside barrier is seen at $1903, which is the bearish 50-DMA. Further north, the 100-DMA at $1908 will be on the buyers’ radars.”

“Monday’s low of $1865 is the immediate cushion, below which the horizontal trendline support at $1851 is the last resort for the XAU bulls.”