Gold Price Analysis: XAU/USD hits fresh monthly lows near $1,870 and remains vulnerable
- Risk aversion boosts US dollar and hits gold that falls below the 20-day moving average.
- Wall Street tumbles amid concerns on a resurgence in coronavirus cases.
Gold is falling sharply and is down almost two percent, even after trimming losses. XAU/USD tumbled to $1,868/oz reaching the lowest level since late-September. As of writing, it trades at $1,880 off lows as risk aversion eases across financial markets.
The Dow Jones drops 2.45% and the Nasdaq slides 2.70%. In Europe, the DAX tumbled 4.10% and the CACA 40 3.45%. The increase in coronavirus cases prompts officials across Europe to consider lockdowns measures that should weigh on the economy.
Risk aversion did not trigger the demand for gold. Not even lower US yields offered support to the metal that suffered like most assets.
From a technical perspective, the recent decline leaves XAU/USD vulnerable to more losses. A consolidation below $1,870 would expose the next support seen at the September of $1,850. On the upside, a recovery above $1,900 would alleviate the bearish pressure. Only a rally that surpass $1,930 (downtrend line) would change the bias to bullish.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
