- The heavily offered tone surrounding the USD assisted gold to gain strong traction on Thursday.
- Technical buying above the $1920 resistance provided an additional boost to the precious metal.
- Investors look forward to the FOMC policy decision for some meaningful trading opportunities.
Gold continued gaining altitude through the early North American session and shot to over three-week tops, around the $1930-32 supply zone in the last hour.
The precious metal gained some strong traction on Thursday and built on its recent strong rebound from one-month lows, around the $1860 region touched last Thursday. The US dollar slumped across the board on the back of the uncertain US political situation, which, in turn, was seen as one of the key factors that benefitted the dollar-denominated commodity.
Democrat Joe Biden appeared to be on track for a victory in the nail-biting US presidential election. However, neither candidate, so far, has the required 270 Electoral College votes to win the White House. Moreover, Republican incumbent President Donald Trump has threatened to undermine the victory by challenging its legality in court.
The heightened uncertainty continued weighing heavily on the buck, which, along with a softer tone surrounding the US Treasury bond yields drove flows towards the non-yielding yellow metal. The strong intraday positive move seemed rather unaffected by indications of yet another strong opening in the US equity markets, which tends to undermine the safe-haven precious metal.
Apart from this, possibilities of some short-term trading stops being triggered above the overnight swing highs, and a subsequent move beyond the $1920 level might have provided an additional boost to the XAU/USD. Some follow-through buying beyond October monthly swing highs resistance near the $1930-32 region should pave the way for additional near-term gains.
Moving ahead, market participants now look forward to the latest FOMC monetary policy decision, scheduled to be announced later during the US session. This, along with US political developments and the broader market risk sentiment, will play a key role in influencing the XAU/USD and assist traders to grab some short-term opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD comes under pressure near 1.0630
Further gains in the Greenback encourage sellers to maintain their control over the risk complex, forcing EUR/USD to retreat further and revisit the 1.0630 region as the US session draws to a close.
GBP/USD stays firm amid BoE, Fed commentary and US data
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.