Gold Price Analysis: XAU/USD holds steady near six-day tops, just below $1920 level

• Gold gained traction for the third consecutive session on Wednesday.
• The offered tone surrounding the USD was seen lending some support.
• Concerns about a steep rise in COVID-19 cases remained supportive.

Gold traded with a positive bias through the first half of the European session and refreshed daily tops, around the $1923 region in the last hour, albeit lacked any strong follow-through.

The precious metal managed to gain traction for the third consecutive session on Wednesday and finally broke out of its four-day-old trading range. The prevalent selling bias surrounding the US dollar was seen as one of the key factors that benefitted the dollar-denominated commodity.

The US President Donald Trump raised hopes for a stimulus breakthrough and said he was willing to accept a large aid bill despite opposition from his own Republican Party. Adding to this, the House of Representatives Speaker Nancy Pelosi said that the stimulus measures would be passed by Congress.

The prospect of a pre-election a pre-election US stimulus package sparked a selloff on the US bonds and pushed the yield on the benchmark 10-year bond to over four-month highs. The lack of demand for government debt, in turn, exerted some heavy downward pressure on the greenback.

Meanwhile, investors remain concerned that the second wave of coronavirus infections could lead to renewed lockdown measures and prove detrimental for the already fragile global economic recovery. The market worries extended some additional support to the safe-haven precious metal.

From a technical perspective, the XAU/USD is now looking to build on its momentum beyond a two-month-old descending trend-line resistance. That said, it will still be prudent to wait for some strong follow-through buying beyond monthly tops, around the $1933 region, before placing fresh bullish bets.

Technical levels to watch