Gold Price Analysis: XAU/USD moving sideways between $1,880 and $1,865

• XAU/USD edges lower, with upside attempts capped below $1,880.
• The precious metal struggles on a moderate risk-on market.
• Longer-term, gold remains trading back and forth between $1,850 and $1,900.

Gold futures remain heavy on Wednesday, with prices dropping for the third day in a row amid a moderate risk-on mood. Bullion prices remain limited below $1,880, with downside attempts contained above $1,860 so far.

The precious metal lost footing during the European trading session, as the drugmaker Pfizer announced more positive news about the latest tests of its COVID-19 vaccine.

Pfizer’s news comes after Moderna announced more promising coronavirus vaccine tests earlier this week. This has contributed to easing market concerns about the economic impact of the pandemic, as global infections reach new record levels, and has triggered a moderate appetite for risk.

XAU/USD retreated from $1,885 to session lows at 1,865 before bouncing up on the early US session. Gold bulls, however, have been stopped again at $1,865 and the precious metal has pulled back to $1,875, half-way through the day’s trading range.

Gold remains trapped between $1,850 and $1,900

Bullion keeps moving without a clear direction within a $50 range below $1,900, consolidating losses after last week’s slump from $1,960 highs. On the upside, the pair should break above $1,900 and $1,910 psychological level and the confluence of the 50 and 100-day SMAS to ease bearish momentum and return towards $1,960 (November 9 high) and $1,995 (September 1 high).

On the contrary, further decline below $1,850 (later-September lows) would increase bearish pressure and might drive the pair towards  $1,795 (mid-July lows) and finally $1,760, the 50% Fibonacci Retracement of the March – July rally.

Technical levels to watch