Gold Price Analysis: XAU/USD refreshes intraday high below $1,900 amid US stimulus updates

• Gold prices extend recovery moves from $1,871 amid risk-on mood.
• US House passes Trump-signed covid aid package, voting in the Senate will be the key.
• Light calendar, holiday-thinned trading restricts market moves.

Gold takes the bids near $1,880 during Tuesday’s Asian session. In doing so, the yellow metal stretches the latest corrective pullback from $1,871 while trying to defy the previous day’s downbeat performance.

Behind the moves is the market optimism emanating from the US coronavirus (COVID-19) aid package news. Following US President Donald Trump’s signing of the much-awaited stimulus, the House passed the bill containing Trump’s demand of $2,000 paycheck. The bill heads to the Senate, up for Tuesday, where the Republicans may block the road to success while citing the anticipated widening of the budget deficit.

Not everything signed by President Trump crossed the House on Tuesday as policymakers voted 322-to-87 to override one of Mr. Trump’s vetoes, underscoring the sweeping popularity of the military legislation, which authorizes a pay raise for the nation’s troops, said The New York Times.

It’s worth mentioning that the Aussie-China tussle, COVID-19 upddates and expected recovery in the US economic growth for 2021, due to the passage of the aid package, also contribute to the recent market moves despite holiday mood restricting the momentum.

Against this backdrop, Wall Street benchmarks refreshed record tops while S&P 500 Futures print mild gains above 3,700 by press time.

Looking forward, the Senate’s performance on the US stimulus will be the key for short-term market direction amid a lack of major data/events.

Technical analysis

Unless providing a daily closing below an ascending trend line from November 30, a $1,878 now, gold prices eye the $1,900 threshold.