Gold Price Analysis: XAU/USD bulls await fresh clues to probe monthly top below $1,950

Gold drops to $1,924, after rising for three consecutive days, during the early Asian session on Thursday. The latest challenges to risk-on mood, initially backed by the hopes of the US coronavirus (COVID-19) relief package and a soft Brexit, seem to have taken clues from the virus updates to probe the yellow metal buyers.

Bears aren’t off the table…

Although optimism concerning the US virus aid package, as conveyed by the American Congress members, favored the yellow metal to probe the monthly high the previous day, US President Donald Trump keeps blaming Democrats for the delay in the much-needed relief. In doing so, the Republican names House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer as the key hurdles in doing what’s right for the American workers and the USA as a whole. It should be noted that the US Senate Majority Leader Mitch McConnell threw cold water on the face of President Trump’s push for the government's help ahead of the elections on Tuesday.

On the other hand, virus woes are getting a grip in the US and Australia, after returning stronger in Europe and the UK. The latest update suggests that 12 out of 50 US states have reported record daily increases in deaths so far in October, per Reuters’ tally. The report also mentions that 26 states have reported a record daily jump in new cases during the mentioned time. Elsewhere, new cases from Victoria challenged Melbourne’s 14-day average with five new cases of the pandemic, coupled with zero cases of deaths due to the virus, per the data from ABC News.

Other than the stimulus and pandemic news, traders’ doubts over any positive results from the Brexit talks, despite agreeing to rejoin the table, could also hamper the market’s earlier optimism.

While portraying the mood, Wall Street closed in a light shade of the red whereas S&P 500 Futures struggle for a clear direction near 3,430.

Moving on, the Asian calendar doesn’t contain any major data/events for gold players to watch, which in turn highlights risk catalysts, mentioned above, as the main drivers. During the US session, weekly prints of the Intiial Jobless Claims and Fedspeak may entertain the momentum traders.

Technical analysis

Gold buyers look for sustained trading beyond a two-month-old falling trend line, currently around $1,922, to attack the monthly top surrounding $1,935. Though, bulls’ dominance past-$1,935 will aim for the mid-September peak close to $1,973.64. Meanwhile, a confluence of 21-day SMA and an upward sloping trend line from September 28, near $1,899, offers strong support to watch.