Gold: Downside is more compelling while below $1900
Gold’s (XAU/USD) rebound from six-week lows of $1850 faltered near the $1891 barrier on Tuesday, although the spot managed to hold on to the recovery gains. The bright metal settled the day around $1878 levels as bulls are losing conviction while below $1900, FXStreet’s Dhwani Mehta reports.
Key quotes
“Amid a partial US market holiday this Wednesday, gold wavers in familiar ranges below the $1891 critical resistance, underpinned by renewed hopes of additional fiscal and monetary policy stimulus to spur the global economic growth.”
“Surging coronavirus cases in the US and Europe could threaten the economic recovery worldwide, rekindling additional stimulus expectations. However, should the virus concerns aggravate and translate into broad risk-aversion, the US dollar could pick up bids as a safe-haven, rendering gold-negative.”
“The bearish 50-HMA resistance at $1889 will offer immediate resistance, above which the bulls need to take out the horizontal 200-HMA hurdle at $1903 to reviving the recovery momentum.”
“Acceptance below powerful support of $1878 could expose the previous month low of $1860. The next downside target awaits at $1850-49, the November 9 low and September 28 low.”
Author
FXStreet Team
FXStreet
