The precious metal,  GOLD,  closed at 1,850.57, after placing a high of 1,861.64, and a low of 1,848.29. On Tuesday, the  GOLD  prices edged lower, due to concerns over a fresh US coronavirus aid package, while a slightly weaker dollar and a subdued treasury yield limited its losses. At the same time, investors kept a close eye on the Federal Reserve policy meeting. The investor sentiment deteriorated on Tuesday, as concerns came up about the potential roadblocks to new US President Joe Biden’s planned $ 1.9 trillion stimulus package, which weighed on the prices for the yellow metal. The rising treasury yields have been supporting the market sentiment for the past few days. On Tuesday, the US Treasury yields fell close to their lowest level in three weeks, putting pressure on the market sentiment and eventually dragging the gold prices down too, due to the escalation of expectations that Joe Biden will not succeed in delivering the massive stimulus measure he has planned.

President Joe Biden’s $ 1.9 trillion pandemic relief proposal faced hurdles as Republicans voiced concerns over the cost, pushing for a small plan that targets vaccine distribution. The hopes that a small portion allocated to the vaccine distribution program might get through Congress also weighed on Tuesday’s  GOLD  market. There was no clarity on where fiscal spending was going, and it was not fully clear how the central bank was going to react, and these uncertainties capped any further upside in the yellow metal prices on Tuesday. Meanwhile, the US Dollar Index, which measures the value of the greenback against a basket of six other currencies, fell from a near one-week high, raising the appeal for safe-haven metals for holders of other currencies.

On the data front, at 19:00 GMT, the US Housing Price Index for November came in, showing an increase to 1.0%, against the expected 0.9%, which supported the US dollar, adding pressure to the gold prices. The S&P/CS Composite -20 HPI for the year also rose, coming in at 9.1%, against the expected 8.8%, boosting the greenback and adding further to the losses in the gold prices. At 19:59 GMT, the Richmond Manufacturing Index for January was released, indicating a drop to 14, against the expected 18, which weighed on the US dollar, capping any further losses in the yellow metal. At 20:00 GMT, the CB Consumer Confidence for January came in, indicating an increase to 89.3, against the expected 88.9, and supporting the US dollar, which in turn added to the losses in gold.

However, the gold losses remained limited on Tuesday, as the weak US dollar ultimately capped any further losses in the precious metal. The US dollar was weak, due to the rising fears surrounding the coronavirus pandemic, despite the vaccine rollout. The daily count of COVID-19 cases in the US now exceeds 175,000, and the situation is aggravated by the fact that millions of people are out of work, which ultimately poses a threat to economic recovery and weighs on the local currency. This limited the downward momentum in GOLD prices on Tuesday.

On Wednesday, the precious metal  GOLD  is trading with a bearish bias at 1,845, violating the support level of 1,848. The 50 periods EMA suggests a selling bias in gold, as it is extending resistance at 1,851. On the lower side,  GOLD  is likely to find support at 1,841 and 1,837. A selling bias dominates. Good luck!