Gold Price Analysis: XAU/USD fizzles upside momentum below $1,980
- Gold prices fail to extend pullback from $1,960 beyond $1,978.
- US dollar bulls confront the bullion buyers amid mixed catalysts.
- American Senators still jostling over fiscal stimulus, coronavirus keeps posting a threat to the global economy.
- Asian economic calendar becomes interesting but major attention remains on the risk catalysts.
Gold prices drop to $1,973 amid the initial Asian session on Tuesday. The precious metal again took a U-turn from $1,978 following its recovery moves from $1,960 during Monday’s late-US session. Even if the US dollar buyers seem to restrict the quote’s near-term upside, the coronavirus (COVID-19) woes keep the bears away.
USD bulls v/s yellow metal buyers…
Considering the US dollar’s recovery moves from the lowest since May 2018, triggered Friday, gold buyers seem to catch a breather. However, sellers aren’t in as broad economic pessimism, backed by the pandemic, favor the risk-aversion wave.
The US dollar benefited from upbeat data and the month-end policy adjustments even if policymakers failed to update on unemployment claim benefits on Friday. The American Senators are not only struggling to finalize the details of the jobless claim but are also far from agreeing on the broad fiscal stimulus plan. In the recent update, House Speaker Nancy Pelosi signaled no deal in sight during this week. On the other hand, US President Donald Trump cheers a report from the University of Chicago, suggesting 68% of people eligible for the benefits receive more than they were earning previously, to fight the extra spending.
Talking about the virus, Victoria is immensely pressured despite the latest easing in new cases, from +670 to 429, whereas numbers from the US seems to stabilize around 60,000 a day off-late. Even so, China, Tokyo and India are some of the countries still jostling over the pandemic, not to mention its devastative economic impacts. Even so, US President Trump rules out plans of permanent lockdown in his latest speech.
Amid all these catalysts, Wall Street managed to kick-start the week on a positive side with the US 10-year Treasury yields. However, S&P 500 Futures seem to struggle while taking rounds to 3,285 by the press time.
Moving on, Japan’s inflation numbers for July will precede Aussie Retail Sales, Trade Balance and monetary policy meeting by the RBA to entertain the Asian traders. Other than the economics, coronavirus updates and news from the US, relating to the fiscal stimulus, will be the key to watch.
Technical analysis
While $1,978 offers immediate upside barrier, $1,988 holds the key to the metal’s rise towards $2,000. On the contrary, Thursday’s low near $1,939 and the previous record high surrounding $1,921 restricts the bullion’s short-term downside.
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.
