Gold Price Analysis: XAU/USD refreshes session lows on upbeat US data, around $1900
|- Gold witnessed some fresh selling on Thursday amid a strong pickup in the USD demand.
- A larger than expected drop in the US initial jobless claims further underpinned the buck.
- The risk-off mood might help limit the downside ahead of Trump-Biden presidential debate.
Gold added to its intraday losses and refreshed daily lows, around the $1902 region in reaction to a larger-than-expected fall in the US Initial Weekly Jobless Claims.
According to the data published by the US Department of Labor (DOL) this Thursday, the number of Americans who filed for unemployment insurance for the first time dropped to 787L last week. The reading was well below the 860K anticipated and the previous month's reading was also revised lower to 842K from 898K reported earlier.
The upbeat release remained supportive of the strong bid tone surrounding the US dollar, which, in turn, was seen as one of the key factors exerting pressure on the dollar-denominated commodity. The XAU/USD erased the previous day's positive move, albeit has still managed to hold its neck just above the $1900 round-figure mark.
A weaker tone around the equity markets extended some support to traditional safe-haven assets. This, coupled with a modest pullback in the US Treasury bond yields further collaborated towards limiting deeper losses for the non-yielding yellow metal, at least for the time being, warranting some caution for aggressive bearish traders.
The global risk sentiment took a hit on Thursday on the back of fading optimism over the US fiscal package, despite optimistic remarks by House of Representatives Speaker Nancy Pelosi. Speaking to MSNBC this Thursday, Pelosi said that stimulus talks were on a good path and they will soon be ready to put pen to paper on the stimulus bill.
Pelosi further added that the aid bill could be passed in the House before election day, though failed to lift the market sentiment. Investors seemed unconvinced that the bid could actually pass through the Senate and doubt the ability of the US Congress to overcome strong opposition from Republicans over a bigger stimulus bill.
From a technical perspective, the XAU/USD has now slipped back closer to a two-week-old ascending trend-line support. Bears are likely to wait for a sustained break through the mentioned trend-line before positioning for any further depreciating move. Investors now look forward to the final presidential debate between President Trump and his Democratic rival Joe Biden for some meaningful trading opportunities.
Technical levels to watch
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