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

 

 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD tumbles to five-week low on rising US yields, energy crisis

EUR/USD has tumbled below 1.17, hitting the lowest since August 20 as Europe struggles with soaring gas prices and China suffers power cuts. Fed Chair Powell is set to testify and comment about the bank's recent taper signal. 

EUR/USD News

GBP/USD drops towards 1.3650 amid firmer dollar, energy crisis

GBP/USD is dropping towards 1.3650, undermined by the US dollar's strength and the UK's fuel problem. The British army is on standby to mitigate fuel shortages. The pound ignores the hawkish comments from BOE Governor Bailey. 

GBP/USD News

XAU/USD drops to $1,735 area amid surging US bond yields

Gold witnessed fresh selling during the early European session and dropped to the $1,735 area or the lowest level since August 11 in the last hour.

Gold News

Crypto markets prepare for a bullish October

Bitcoin price shows signs of bullish breakout as it traverses a falling wedge. Ethereum price also displays an optimistic outlook as it forms a descending parallel channel.

Read more

Conference Board Consumer Confidence Preview: Unhappy but still spending

The collapse of consumer optimism in August has not exacted the expected toll from American spending, the most important factor in sustaining the US  economic recovery. August’s confidence reading at 113.8 was the lowest since February.

Read more

Forex MAJORS

Cryptocurrencies

Signatures