- Gold fades upside momentum following Friday’s pullback from mid-September high.
- Expected struggle for Biden Presidency, virus woes probe market optimists.
- A lack of major data/events adds to inactivity, risk catalysts keep the driver’s seat.
Gold prices seesaw around $1,951/52 during the initial hour of Monday’s Asian session. The yellow metal began the week’s trading near $1,953.50 while keeping the late Friday's range between $1,950 and $1,955. The bullion’s recent inactivity could be traced to the uncertainty over the US polity as Donald Trump challenges Joe Biden’s victory in the latest elections. Also, the Republicans’ hold in the Senate offers additional troubles for the recently elected Democratic leader. Further, the coronavirus (COVID-19) and Brexit are additional hurdles for the precious metal buyers.
Old risks join the new ones as US elections are over…
Despite winning US presidential elections, Biden’s hardships aren’t over as Trump has already filed multiple lawsuits citing inappropriate handling of the ballot counting. Not only the ex-President’s effort to block the way to the White House, but the Republican majority in the GOP also questions the Democratic leadership and makes it harder for future decision-making.
Elsewhere, global COVID-19 cases jump over 50 million and the developed economies like the US and Europe have recently been a victim of the wave 2.0. The vaccine is less likely to arrive anytime before 2021 and hence a few more weeks of economic downplay can argue the risk-takers. Biden is up for a covid task force team and will convey the details later today. Traders await hints of further stimulus for fresh risk-on.
Brexit drama offers additional support to the safe-havens other than the politics and virus woes. While the recent update from London, by European Union (EU) Chief Brexit Negotiator Michel Barnier, suggests optimism in handling the key issue, no deal has been finalized even ahead of the key EU summit, scheduled during the mid-November.
Against this backdrop, global equities catch a breather after the stellar run-up during the last week. Though, US 10-year Treasury yields jump back above 0.80%, currently around 0.81%.
Moving on, a light calendar can keep the gold traders directed towards the major market risks, mentioned above, for fresh impulse.
Technical analysis
An ascending trend line from September 21, at $1,953 now, restricts the metal’s immediate upside ahead of September 16 top surrounding $1,973. Though, Friday’s spinning top keeps the sellers hopeful while targeting October 12 high close to $1,933.
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.