Gold Price Analysis: XAU/USD buyers attack $1,900 as the key day begins
|- Gold seesaws near one week high after closely missing the $1,900 mark the previous day.
- Broad US dollar weakness helps the bullion buyers to cheer market’s cautious sentiment.
- Uncertainty surrounding American aid package, Brexit and virus woes weigh on market sentiment.
- US presidential debate and Chinese PMIs are in the spotlight.
Gold prices tread water around $1,898/99 during the initial Asian session on Wednesday. The yellow metal rose to the highest since September 23 the previous day before recently losing upside momentum ahead of the key events, including the US presidential debate and China PMIs. It’s worth mentioning that the precious metal bulls have earlier cheered the US dollar declines, not to forget about the market risks, on Monday and Tuesday.
Traders turn cautious…
Although the weakness in the risk-tone sentiment should have joined upbeat US data to ideally help the US dollar, as it did previously, the greenback declined as markets await the first face-off between the Republicans and Democrats, up for publishing at 1:00 GMT. Also negatively hurting the US dollar could be a lack of clarity over the much-awaited coronavirus (COVID-19) stimulus bill. While the Senate is advancing on the stopgap funding, the White House recently counter-offered the Democratic proposal of $2.2 trillion by around $1.5-$1.6 trillion, as per Fox news.
Elsewhere, the COVID-19 woes are taking over in the UK, Europe and recently in Canada. While the local lockdowns are considered as intermediate relief, nothing helps unless we have a vaccine.
The tussle among the European and British policymakers over the Brexit trade deal kicked off on Tuesday. Even if the bloc eased on its previous stance and asked the Tories for a draft proposal on the joint legal documents, the recent passage of the Internal Market Bill (IMB) in the UK’s House of Commons will offer a bumpy road into the on-going discussions.
It should also be noted that China’s lesser than promised buying of the US goods threatens the Sino-American trade deal and adds uncertainty into the macro environment.
Amid all these catalysts, S&P 500 Futures print mild gains despite Wall Street’s sluggish performance.
Looking forward, global traders will keep eyes on the macros ahead of the updates from the debate and China PMIs. While Democratic candidate Joe Biden is leading the polls, US President Donald Trump is always a bundle of surprise and a market mover. On the other hand, China’s September month Manufacturing PMIs from the official source and Caixin may keep the commodity traders hopeful.
Technical analysis
Not only the $1,900 threshold but the early-September low near $1,907 also add to gold’s short-term upside barriers. On the contrary, the 100-day SMA level of $1,851 becomes the key support.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.