Gold eases from multi-year tops, still well bid above $1850

• Gold continued scaling higher for the fourth consecutive session on Wednesday.
• The move-up was fueled by concerns over the continuous rise in COVID-19 cases.
• A subdued USD demand remained supportive of the bid tone around the metal.

Gold now seems to have entered a bullish consolidation phase and was last seen hovering around the $1855-54 region, just below multi-year tops set earlier this Wednesday.

The precious metal prolonged its recent strong positive momentum and continued gaining traction for the fourth consecutive session. The rapid move up to the highest level since September 2011 was sponsored by concerns that the second wave of coronavirus infections in the US could delay the economic recovery.

This comes amid the impasse over the next round of US economic stimulus measures, which kept the US dollar bulls on the defensive and provided an additional boost to the dollar-denominated commodity. It is worth reporting that Republicans and Democrats have been struggling to reach consensus on a $3 trillion relief bill.

Nevertheless, expectations of more fiscal stimulus continued driving flows towards the non-yielding yellow metal. However, some stability in the global equity markets, amid the latest optimism over a potential COVID-19 vaccine, forced bullish trades to take a brief pause amid extremely overbought conditions on short-term charts.

Hence, a modest pullback from daily swing highs could be solely attributed to some profit-taking. Any subsequent slide towards the $1840 horizontal zone might still be seen as a buying opportunity, which might help limit any deeper losses.

Technical levels to watch