FXStreet reports that in the view of Carsten Fritsch, Precious Metals Analyst at Commerzbank, outflows in the gold-backed exchange-traded funds (ETFs) in November was the main driver behind the metal’s fall.

“The gold market saw continued selling pressure last month as investor sentiment was boosted by news of three potential vaccines for the COVID-19 virus.”

“Gold-backed exchange-traded funds (ETFs) have been the key driver behind gold's disappointing price action.”

"News from India offers a glimmer of hope. Gold demand there apparently picked up noticeably last week on the back of lower prices. A revival of physical demand in Asia would make an important contribution to stabilizing the gold price. And in turn, it would need to stabilize to restore the badly-shaken confidence of ETF investors in gold."

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories decreased by 0.679 million barrels in the week ended November 27. Economists had forecast a decline of 2.358 million barrels.

At the same time, gasoline stocks rose by 3.491 million barrels, while analysts had expected a gain of 2.386 million barrels. Distillate stocks advanced by 3.238 million barrels, while analysts had forecast a decrease of 0.209 million barrels.

Meanwhile, oil production in the U.S. grew by 100,000 barrels a day to 11.100 million barrels a day.

U.S. crude oil imports averaged 5.4 million barrels per day last week, up by 171,000 thousand barrels per day from the previous week.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, suggests that the recent price action in the precious metal hints at the idea that a strong contention area could have emerged around $1,760 per ounce.

“Gold has sold off to, tested and reversed from the 1760/1765.61 May high and 50% retracement. We view the market as having based here, but note that this support is further reinforced by the 1733.26 55 week ma.”

“Rallies will find initial resistance at 1850 (the November low), just to alleviate immediate downside pressure. This guards the 55 day ma at 1910.90 and the mid-September high at 1973.8, for a rally to the 78.6% retracement at 2025 which guards the target band of 2070/2088. This is a combination of Fibonacci extensions and Elliott wave counts.”