Gold: More scope to the downside ahead of FOMC Minutes
|Gold tracked stocks lower on Tuesday after Trump rejected stimulus talks though Trump’s latest call for partial stimulus lent some support, but not for long. Technical indicators favor the bears ahead of Fedspeak and FOMC minutes, FXStreet’s Dhwani Mehta reports.
Key quotes
“Trump called on for partial stimulus, urging Congress to approve paycheck protection and airline support. The sentiment received a fresh lift propping the Asian equities while the US dollar stalled its overnight rally.”
“Despite gold’s pullback, the path of least resistance remains to the downside, as the safe-haven dollar will likely remain in demand amid fresh concerns on the US economic recovery, in the wake of no prospects of fiscal stimulus until after the US elections. Also, markets would favor the US currency ahead of the Fedspeak and FOMC minutes, keeping the gold bulls at bay.”
“Looking at gold’s hourly chart, the price seems struggling to extend the recovery momentum from weekly lows, with the immediate upside barrier seen at horizontal 200-hourly Simple Moving Average (HMA), currently at $1890. Acceptance above the latter would expose the bearish 21-HMA at $1895. The next critical resistance awaits at $1902, the confluence of the 50 and 100-HMAs.”
“A failure to defend the weekly lows of $1873, the next robust support at $1860 will be put to test, which is the 100-day Simple Moving Average (DMA).”
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