Gold Price Analysis: XAU/USD mildly heavy below $1,750, looks to US-China tension for clues


  • Gold extends downside from intraday top of $1,736.
  • US holiday, absence of US President Donald Trump’s reaction to Hong Kong issue probes the latest risk aversion wave.
  • A light economic calendar adds to the market’s inability in extending previous run-up.

Gold prices drop to $1,731, print 0.20% loss, intraday low of $1,730.37, by the press time of Tokyo open on Monday. Although fresh risk-off sentiment, helped by the US-China fight over Hong Kong, offered bids to the bullion on Friday, buyers seem to step back amid a lack of major push from the US President Trump.

China’s move towards enacting national security legislation in Hong Kong gains a major criticism from the Western world while the US policymakers remain on the top of dissenters. The Trump administration officials largely defy Beijing’s move while also pushing forward to restrict Chinese companies from the American exchanges and staying ready to sanction diplomats from the Asian major involved in the Xinjiang case.

Even so, US President Donald Trump is yet to register his harsh retaliation to the dragon nation’s attack on Hong Kong’s free status.

The move is likely troubling the risk-averse traders during the quiet Asian session, which in turn weighs on the yellow metal’s safe-haven demand.

It should also be noted that the likely reopening of the global economies and nearness to the coronavirus (COVID-19) vaccine also exerts a mild downside pressure onto the precious metal.

That said, the market’s risk-tone sentiment also retrace with the S&P 500 Futures marking 0.45% gains to 2,965 whereas Japan’s NIKKEI being over 1.5% in green to 20,690 by the press time.

Considering the lack of major data/events, coupled with the US holidays, traders will keep eyes on the updates concerning the US-China relations and the virus issues for immediate direction. It should, however, be noted that the broad pessimism will keep the bullion buyers hopeful.

Technical analysis

A confluence of the monthly support line and 21-day SMA near $1,717 seems to restrict the bullion’s short-term declines ahead of $1,700 round-figures. Alternatively, $1,755 and the recent high near $1,765/66 could keep the bulls guarded before highlighting an ascending trend line from February 24, at $1,775 now.

Additional important levels

Overview
Today last price 1730.9
Today Daily Change -3.32
Today Daily Change % -0.19%
Today daily open 1734.22
 
Trends
Daily SMA20 1715.66
Daily SMA50 1663.44
Daily SMA100 1626.42
Daily SMA200 1559.69
 
Levels
Previous Daily High 1740.43
Previous Daily Low 1724.46
Previous Weekly High 1765.38
Previous Weekly Low 1717.34
Previous Monthly High 1747.82
Previous Monthly Low 1568.46
Daily Fibonacci 38.2% 1734.33
Daily Fibonacci 61.8% 1730.56
Daily Pivot Point S1 1725.64
Daily Pivot Point S2 1717.07
Daily Pivot Point S3 1709.67
Daily Pivot Point R1 1741.61
Daily Pivot Point R2 1749.01
Daily Pivot Point R3 1757.58

 

 

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