Gold Price Analysis: XAU/USD off lows, still in the red below $1900 mark


  • Gold witnessed some follow-through selling for the third consecutive session on Monday.
  • A modest pickup in the USD demand was seen as a key factor that exerted some pressure.
  • The prevalent risk-off mood undermined the safe-haven XAU/USD and helped limit losses.

Gold edged lower on the first day of a new trading week and dropped to over one-week lows during the Asian session, albeit lacked any strong follow-through selling.

The precious metal extended last week's rejection slide from the $1931-33 supply zone and remained depressed for the third consecutive session on Monday. The downtick was exclusively sponsored by a goodish pickup in the US dollar demand, which tends to undermine the dollar-denominated commodity.

Investors remain worried that the second wave of coronavirus infections in Europe and the US could prove detrimental for the already fragile global economic recovery. This, along with the lack of progress in the US stimulus talks benefitted the greenback's status as the global reserve currency.

The US House Speaker Nancy Pelosi remained optimistic over the next round of the US fiscal stimulus measures. Investors, however, seemed unconvinced that US lawmakers will be able to strike a deal before the US presidential election on November 3 amid strong opposition from Senate Republicans.

Meanwhile, receding hopes for a pre-election fiscal deal and concerns about the imposition of stricter lockdown measures to curb the second wave of COVID-19 cases weighed on investors' sentiment. This, in turn, extended some support to the safe-haven precious metal and helped limit deeper losses.

From a technical perspective, the XAU/USD has broken below a support marked by a near three-week-old ascending trend-line support. Adding to this, acceptance below the $1900 mark might have already set the stage for additional weakness, towards testing 100-day SMA support near the $1883 region.

Market participants now look forward to the US economic docket, featuring the only release of New Home Sales figures. The data, along with the broader market risk sentiment, development surrounding the US fiscal stimulus and coronavirus saga, will be looked upon for some short-term trading impetus.

Technical levels to watch

XAU/USD

Overview
Today last price 1897.23
Today Daily Change -3.67
Today Daily Change % -0.19
Today daily open 1900.9
 
Trends
Daily SMA20 1901.83
Daily SMA50 1923.08
Daily SMA100 1881.38
Daily SMA200 1761.89
 
Levels
Previous Daily High 1914.3
Previous Daily Low 1894.48
Previous Weekly High 1931.54
Previous Weekly Low 1894.48
Previous Monthly High 1992.42
Previous Monthly Low 1848.82
Daily Fibonacci 38.2% 1902.05
Daily Fibonacci 61.8% 1906.73
Daily Pivot Point S1 1892.15
Daily Pivot Point S2 1883.41
Daily Pivot Point S3 1872.33
Daily Pivot Point R1 1911.97
Daily Pivot Point R2 1923.05
Daily Pivot Point R3 1931.79

 

 

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