Gold Price Analysis: XAU/USD searches for clues to extend recovery moves beyond $1,950

Gold prices struggle to keep the previous day’s pause to two-day losing streak.
Risk-on sentiment continues even as traders await China data dump.
No-deal Brexit fears gain momentum after Tories squash attempt to block the Internal Market Bill.
US eases travel advisory concerning China, Hong Kong.

Anil Panchal FXStreet

Gold seesaws around $1,957 during the pre-Tokyo open trading on Tuesday. The yellow metal snapped two-day declines the previous day amid market optimism. However, the bullion traders turn cautious ahead of the key China data since the start of Asian market hours. The reason could also be traced from the fears of no-deal Brexit and fading hopes of the coronavirus (COVID-19) vaccine.

Cautious optimism probes gold buyers…

With the US challenging the AstraZeneca’s decision to restart the COVID-19 vaccine trials, the market’s risk-on moves catch a breather as American regulators fear serious side effects.

Also questioning the market mood could be the news that the UK’s House of Commons turned down the opposition Labour Party’s push to block the Internal Market Bill (IMB) in a move to avoid hard Brexit. The bill gets harsh criticism from the European Union (EU) and some of the Tory backbenchers but manages to stay on the table due to the Conservative majority in the House.

On the contrary, news that US State Department eases travel warnings against China and Hong Kong pleased the risk-takers. Further, the Washington Post’s update suggesting the US blocks Chinese goods made with forced labor also questions the risk-on mood.

Amid all these plays, S&P 500 Futures rise 0.25% to 3,376 after Wall Street benchmarks gained over 1.0% each during Monday’s trading.

Moving on, traders will keep eyes on China’s Industrial Production and Retail Sales data for August. Forecasts suggest the key economics recover from -1.1% and +4.8% to 0.0% and +5.1% respectively on the YoY basis. However, fears of disappointment can’t be ruled out as the second wave of the virus has already hit major economies except for Beijing.

Should the scheduled data prints downbeat readings, the trading sentiment may get another reason to recall the US dollar buyers, which in turn will negatively affect the gold prices.

Technical analysis

Unless breaking below the 50-day EMA level near $1,913, a falling trend line from August 18, at $1,968 now, lures the bulls.

Additional important levels

Overview
Today last price	1957.28
Today Daily Change	16.90
Today Daily Change %	0.87%
Today daily open	1940.38

Trends
Daily SMA20	1947.38
Daily SMA50	1919.63
Daily SMA100	1824.06
Daily SMA200	1702.55

Levels
Previous Daily High	1954.78
Previous Daily Low	1937.29
Previous Weekly High	1966.54
Previous Weekly Low	1906.62
Previous Monthly High	2075.32
Previous Monthly Low	1863.24
Daily Fibonacci 38.2%	1943.97
Daily Fibonacci 61.8%	1948.1
Daily Pivot Point S1	1933.52
Daily Pivot Point S2	1926.66
Daily Pivot Point S3	1916.03
Daily Pivot Point R1	1951.01
Daily Pivot Point R2	1961.64
Daily Pivot Point R3	1968.5

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.

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