Gold plummets after Trump announces intention to pass on fiscal stimulus bill

Fundamental backdrop

Donald Trump has taken to Twitter to confirm he will not be looking to accept the latest negotiated deal between the Democrats and Republicans regarding fiscal stimulus. The Democrats wanted a deal worth USD 2.4 trillion but Trump said:

Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.

Gold 1-hour chart

The gold price had been moving lower leading into the release but this was just a catalyst for more damage. Now the precious metal has broken below USD 1900 per troy ounce and hit a low of USD 1889.40 per ounce. 

The current support at the red line on the chart is holding off the bears for now but if the level breaks the next is at USD 1875 per ounce (green line). Beyond that, the next level of defence is at the wave low near USD 1850 per ounce.

Interestingly the Relative Strength Index had been showing a divergence signal before the new struck. This is when the price makes a higher high but indicator makes a lower higher. In this case it worked nicely and the price has move lower.

Additional levels