Gold Price Analysis: XAU/USD consolidates the biggest losses in two weeks under $1,900
- Gold remains depressed near one week low, fails to keep bounces off $1,874.88.
- US House Leader Mitch McConnel backs President Trump’s rejection of bipartisan stimulus talks.
- Virus woes regain market attention while Brexit pessimism adds to the risk-off mood.
- A light calendar in Asia keeps risk catalysts on the driver’s seat.
Gold prices stay pressured around $1,877 during the initial Asian trading on Wednesday. The yellow metal dropped the heaviest since late-September as the market’s risk aversion renewed the US dollar strength the previous day.
No more push to break US stimulus deadlock…
US President Donald Trump lashed out at the opposition Democratic Party while closing door on the face of the efforts to unveil details of the much-awaited American aid package. Following the Republican leader’s announcement, the House Senior McConnell also joined the league to denounce the Democrats’ push for more.
Also adding to the market’s risk aversion wave could be the recent speculations that the European Union (EU) is intentionally stretching Brexit talks and is ready to take the risk of a no-deal divorce. Furthermore, fears of the coronavirus (COVID-19) and the fresh headlines suggesting the UK’s dislike for China exert additional burden onto the sober mood. The forecast from the University of Washington suggests the COVID-19 related deaths in the US will rise to 360,000 by the end of 2020.
It’s worth mentioning that the Fed Chair Jerome Powell’s push for more stimulus and downbeat US data could also play their roles to propel the US dollar, which in turn dragged the gold prices downward.
Amid all these catalysts, Wall Street benchmarks flashed red signals whereas the US 10-year Treasury yields dropped 2.8 basis points to 0.734% by the end of Tuesday’s trading. Further, S&P 500 Futures also mark over 0.30% intraday losses while picking up offers around 3,340 by the time of the press.
Moving on, an absence of major data/events in Asia will keep the gold traders directed towards analyzing the risk factors for immediate direction. In doing so, Trump’s health, fiscal stimulus, virus woes and the Brexit are likely the keywords to observe.
Technical analysis
Failures to cross a two-month-old falling trend line drag gold towards revisiting the September month’s low near $1,848.'
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
