Gold Prices Have Oscillated Around The Sticky $1850

Gold prices have oscillated around the sticky $1850 region due to the absence of a fresh directional catalyst. Bulls remain empowered by the great “reflation trade” and surging coronavirus cases, while bears continue to draw strength from a stabilising dollar.

Will gold prices fall?

Given how prices are trading marginally below the 200-day Simple Moving Average, the current outlook swings in favour of bears. Sustained weakness below $1850 could open the door back towards $1800.

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Safe-haven dollar steadies

The dollar steadied on Friday, heading for a weekly gain as the fierce battle between Reddit traders and Wall Street boosted demand for safe-haven assets.

Since the start of the week, the greenback has derived strength from concerns around a possible delay in Joe Biden’s $1.9 trillion fiscal package. The upside was also fuelled by hiccups in the coronavirus vaccine rollouts across the globe. Given how uncertainty is likely to intensify amid the developments in Wall Street, investors may rush towards the dollar’s safe embrace in the near to medium term.

Looking at the technical picture, the Dollar Index has gained just over 0.5% this week.  It will be interesting to see whether bulls can achieve a weekly close above 91.00.

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