Gold Price Analysis: XAU/USD bulls jostle with bears beyond $2,000
|- Gold prices struggle for a clear direction after falling for last two days, recently bounced off $2,019.42.
- Risk-tone sentiment stays heavy amid US-China tussle, virus woes.
- US stimulus and blasts near the Iraq-Kuwait border become additional catalysts.
- Economic calendar remains empty in Asia but risk factors stay on the driver’s seat.
Gold prices seesaw near $2,027/28 during the pre-Tokyo open Asian session on Tuesday. The yellow metal recently recovered from $2,019 but stays pressured after declining for the last two consecutive trading days. Despite many indicators portraying the rush to risk-safety, the US dollar’s gains could be spotted as the key driver of the bullion’s latest weakness.
US President Trump stays ready to save the greenback…
Be it his executive orders concerning the unemployment claims or sanctions on Chinese diplomats including Hong Kong Leader Carry Liam, not to forget banning business with TikTok and WeChat, US President Donald Trump’s actions pulled the US dollar back from more than two years. To portray the same, the US dollar index (DXY) flashed the second positive daily closing to 93.61 by the end of Monday.
While the Republican leaders’ performance on stimulus pushed Democrats back to the negotiation table for the coronavirus (COVID-19) relief bill, China retaliated to the American moves by sanctioning 11 policymakers that include two Senators. Recently, US President Trump showed optimism towards the American economy and said that he sees no reason why can’t economy grow 20% in the third quarter (Q3). The US leader also said that phase one deal with China means “very little”.
Elsewhere, the COVID-19 woes continue with Victoria struggling and figures from the US stabilizing around the daily average of 60,000. However, Asian economies are likely to witness the harsh impacts of the second wave as some of them, like India, are still grappling with the first round of the pandemic.
Amid all these catalysts, S&P 500 Futures drop 0.07% to 3,350 by the press after Wall Street benchmark traded mixed on Monday.
Looking forward, a light calendar will keep gold traders look for risk catalysts for fresh impulse. In doing so, US-China news and American stimulus will join the COVID-19 headlines to occupy the frontlines.
Technical analysis
A two-week-old support line, at $2,019 now, can challenge the pair’s immediate downside ahead of the $2,000 threshold. On the upside, $2,050 and the recent high near $2,075 could entertain the bulls ahead of pushing them towards $2,100 round-figures.
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