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

Gold is now 1.11% lower on the session as a wave of selling pressure kicks in.
US President Trump announces on Twitter he will not be taking the latest fiscal deal.

Rajan Dhall, MSTA FX Daily

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

XAU/USD

Overview
Today last price	1897.5
Today Daily Change	-15.92
Today Daily Change %	-0.83
Today daily open	1913.42

Trends
Daily SMA20	1916.56
Daily SMA50	1945.54
Daily SMA100	1854.2
Daily SMA200	1734.81

Levels
Previous Daily High	1918.82
Previous Daily Low	1887.06
Previous Weekly High	1917.16
Previous Weekly Low	1848.82
Previous Monthly High	1992.42
Previous Monthly Low	1848.82
Daily Fibonacci 38.2%	1900.33
Daily Fibonacci 61.8%	1906.76
Daily Pivot Point S1	1885.78
Daily Pivot Point S2	1874.24
Daily Pivot Point S3	1858.55
Daily Pivot Point R1	1913.01
Daily Pivot Point R2	1928.7
Daily Pivot Point R3	1940.24

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

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