Gold Price Analysis: XAU/USD holds steady below $1880 level, upside seems limited
- The US political uncertainty kept the USD bulls on the defensive and assisted gold to gain traction.
- The uptick lacked any strong follow-through buying and runs the risk of fizzling out rather quickly.
- Investors now look forward to the release of the Advance US Q3 GDP report for a fresh impetus.
Gold edged higher through the early European session and was last seen hovering near the top end of its daily range, just above the $1880.
The precious metal managed to regain some positive traction on Thursday and recovered a part of the previous day's sharp fall to one-month lows amid a subdued US dollar demand. The uncertainty over the outcome of the US presidential election held the USD bulls from placing aggressive bids, which, in turn, was seen as a key factor lending some support to the dollar-denominated commodity.
It is worth reporting that national polls have been indicating that Democrat rival Joe Biden has a lead over Republican incumbent President Donald Trump. Investors, however, remain wary on the back of a narrow gap in certain key swing states. Adding to the uncertainty is the possibility that the outcome being contested, which further drove investors towards the safe-haven yellow metal.
Despite the supporting factors, the uptick lacked any strong follow-through amid a solid rebound in the US equity futures. Moreover, the overnight break below 100-day SMA support for the first time since March further warrants some caution for bullish traders. Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
That said, investors might still prefer to wait on the sidelines ahead of Thursday's key release of the Advance Q3 GDP report. The US economy is expected to have grown by 31% annualized pace during the July-September quarter. Any meaningful divergence from the anticipated figures might infuse some volatility in the financial markets and assist traders to grab some meaningful opportunities.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
