Gold Price Analysis: XAU/USD rallies to 3-week tops, eyeing a move beyond $1930-32 supply zone
|- The heavily offered tone surrounding the USD assisted gold to gain strong traction on Thursday.
- Technical buying above the $1920 resistance provided an additional boost to the precious metal.
- Investors look forward to the FOMC policy decision for some meaningful trading opportunities.
Gold continued gaining altitude through the early North American session and shot to over three-week tops, around the $1930-32 supply zone in the last hour.
The precious metal gained some strong traction on Thursday and built on its recent strong rebound from one-month lows, around the $1860 region touched last Thursday. The US dollar slumped across the board on the back of the uncertain US political situation, which, in turn, was seen as one of the key factors that benefitted the dollar-denominated commodity.
Democrat Joe Biden appeared to be on track for a victory in the nail-biting US presidential election. However, neither candidate, so far, has the required 270 Electoral College votes to win the White House. Moreover, Republican incumbent President Donald Trump has threatened to undermine the victory by challenging its legality in court.
The heightened uncertainty continued weighing heavily on the buck, which, along with a softer tone surrounding the US Treasury bond yields drove flows towards the non-yielding yellow metal. The strong intraday positive move seemed rather unaffected by indications of yet another strong opening in the US equity markets, which tends to undermine the safe-haven precious metal.
Apart from this, possibilities of some short-term trading stops being triggered above the overnight swing highs, and a subsequent move beyond the $1920 level might have provided an additional boost to the XAU/USD. Some follow-through buying beyond October monthly swing highs resistance near the $1930-32 region should pave the way for additional near-term gains.
Moving ahead, market participants now look forward to the latest FOMC monetary policy decision, scheduled to be announced later during the US session. This, along with US political developments and the broader market risk sentiment, will play a key role in influencing the XAU/USD and assist traders to grab some short-term opportunities.
Technical levels to watch
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