As incoming US President Joe Biden has shared details of an additional $1.9trillion economic recovery plan, investors have started to shed their exposure to safe-haven assets. Gold price on the XAUUSD chart fell as a result.
Despite the announcement of a large stimulus that would see Americans receive an additional $1,400 monthly payments, spending for public health campaigns, and enhanced payments to the unemployed, the US Dollar did not suffer in its pairing with gold. Rather the greenback has strengthened by 0.21% against the yellow metal to keep gold prices firmly below $1850.
Technical Levels to Watch
Gold prices remain firmly under 1850.78. Increased selling momentum at this area pushes price towards 1821.55, with 1800.34 and 1788.90 also lining up as further downside targets.
On the flip side, a recovery towards 1869.39 has to follow a break of 1850.78. This move could also allow for stronger bullish momentum towards 1900.76 or 1918.68. However, economic recovery usually suppresses gold prices. Once the mass vaccinations contain the coronavirus pandemic and usher in recovery, upside moves on the XAUUSD may be capped.
XAUUSD Daily Chart