Gold Price Analysis: XAU/USD erases losses and approaches $1900

• XAU/USD gains for the third consecutive day, despite risk appetite.
• Yellow metal testing the 20-day moving average at $1895 that protects $1900.

Gold bottomed hours ago at $1,863/oz and then recovered $30, erasing losses. It is back above $1,890 after making a sharp reversal. The yellow metal tumbled earlier on Monday after a report regarding a COVID-19 vaccine triggered a rally in equity prices.

The rally from the bottom in gold took place even as Wall Street held onto gains. The US dollar lost some momentum and pulled back. Monday’s moves bode well for gold that this time is rising on good news. A week ago, when the Pfizer vaccine report came out it tumbled from above $1950 to $1850, failing to recover later.

On a wider perspective, gold continues to consolidate within a bullish trend. Last week it was rejected from above $1,930 and it found support again around the $1,850 zone that is the key support at the moment.

Analysts at CitiBank continue to see XAU/USD moving higher over the next months with potential corrections. “We do not expect Fedspeak or monetary policy in the US to shift for quite some time. During multi-year secular gold bull cycles, large selloffs are not unusual and the current gold bull cycle that began in 4Q’18 has not posted a negative quarterly return for two years. We maintain a 6-12m bullish target at $2,300-$2,400/oz.”

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