Is gold changing a long-term direction?
|Gold is steadily plummeting for the third consecutive day. Where is the bottom? Let’s find out.
XAU/USD has been pressed down by the strong demand for the safe-haven US dollar. The greenback has been boosted by the worsened market sentiment amid rising cases in Europe and the UK. Just recently the UK Prime Minister Boris Johnson has imposed new restrictions in the country for further 6 months as new infections have surged, and also colder weather is coming back, making people more vulnerable to respiratory viruses and especially Covid-19.
Fed’s Powell delivered a statement yesterday and pointed to a resilient economic activity, but emphasized there is a long way to the full recovery. The USD surged after that report, pushing gold to the downside. Besides, the optimism over the stock markets diminished the gold’s safe-haven status.
Overall, the current situation on the market points to the further gold bearishness, but it may change after the US Manufacturing and Services PMI reports at 16:45 MT time and Powell’s speech at 17:00 MT time. Pay attention to them!
Technical tips
Gold has been trading in a triangle pattern since the beginning of August. After that, it has broken the lower trend line, confirming the bearish breakthrough. Therefore, the yellow metal is likely to keep falling further. The move below the support of $1 880 will drive the price to the key barrier of $1 860. In the opposite scenario, if it jumps above the psychological mark of $1 900, the way towards $1 940 will be open.
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