Gold is trading higher against the greenback today. The yellow metal had a drop to the lowest level of $1778 the previous day since November 4.

The uptrend of the yellow metal can be linked to the pullback in the US Treasury yields. Pullback of the US Treasury yields can be related to the release of FOMC minutes yesterday. FOMC minutes from the last meeting of the Fed’s monetary policy-setting committee showed FOMC members getting more concerned about rising inflationary pressures and now believe that inflation will hang around longer than previously thought. Inflation will subside significantly in 2022, believes the committee members. Some Fed officials wanted a faster pace of “tapering” of the Fed’s bond-buying program. Others were worried about elevated asset valuations. The members said labor participation would likely be lower in the coming months because of early retirements.

US had a big batch of data yesterday with mixed outcomes but mostly upbeat, however this does not create any impact on the yellow metal. US Personal Consumption Expenditures Price Index jumped to 5.0% YoY in October, surpassing 4.6% expected and 4.4% prior. GDP quarterly report of US showed 2.1% by exceeding expectation of 2%.Upbeat Core durable goods order data showing 0.5% also beat the expectation of 0.3%.

On the other hand, Rising Covid-19 cases in Europe and Asia continue to create risk sentiment in the market. Austria is on a virtually complete lockdown and German officials are warning Covid cases are rising at an alarming rate. This Covid woes also favors the yellow metal.

XAU/USD 4 Hour Chart:

Support: 1779.0 (S1), 1769.7 (S2), 1761.0 (S3).

Resistance: 1796.9 (R1), 1805.6 (R2), 1814.8 (R3).

In the meantime, the uptrend of the yellow metal relies on the lackluster market conditions amid a lack of major data/events, as well as the Thanksgiving Day holiday in the US. We expect a bullish trend for XAU/USD.