Listen to the latest market mood for the XAUUSD.

This week’s positive vaccine news on the Pfizer headlines has caused 10Y US bond yields to spike higher. This helped the USD higher too which resulted in XAUUSD seeing its worst single day in a month as investors begin to look through the crisis and into a post-COVID-19 world where central banks start raising interest rates. This would be a negative environment for gold.

However, despite these recent falls in XAUUSD the medium-term picture still favours further gold buyers. Interest rates are low, QE purchases are still high around the world, and there are questions over how quickly a vaccine can be distributed and used.

This means that deeper pullbacks back down towards $1820 and the 200EMA on the daily chart should find dip buyers.

Trade Risks: The main risk to this trade is if the positive vaccine news causes US10 year bond yields to keep rising. This will strengthen the USD and put further selling pressure on gold.