Gold Price Analysis: XAU/USD sellers attack $1,900 as stimulus hopes wane


  • Gold fails to keep previous day’s recovery moves from $1,882 to $1,912.
  • US Treasury Secretary Steve Mnuchin defies hopes of any stimulus before election.
  • Virus woes push for national lockdowns in the UK and Europe.
  • China’s inflation data, risk catalysts should be watched closely in Asia.

Gold prices remain depressed, currently declining to $1,899.30, down 0.15% intraday, during the pre-Tokyo open Asian trading on Thursday. In doing so, the yellow metal fails to extend Wednesday’s recovery moves as fears of no aid package from the US gain momentum. Additionally, worsening coronavirus (COVID-19) conditions in Europe and the UK suggest that the local lockdowns aren’t a cure to tame the pandemic, which in turn suggests national activity restrictions and challenge the risk.

No stimulus ahead of the US election?

Despite US President Donald Trump’s recent offers to break the COVID-19 stimulus deadlock, the opposition Democratic Party remains firm in its demands. US Treasury Secretary Mnuchin recently blamed the opposition to raise bars for the much-awaited aid package before the election so that Trump’s keeps lagging the pre-election polls. The diplomat also cited notable progress in talks with House Speaker Nancy Pelosi despite still having a major difference that leads to continuous talks.

Not only the stimulus delay but rising virus cases and death tolls in Europe, coupled with a halt in the vaccine trials, also challenge the market’s risk sentiment. Although European governments are trying hard to avoid national lockdowns with measured approaches, failures are shouting from the roof with numbers reaching early wave levels.

It should be noted that fears of a no-deal Brexit and the dovish tone of major central bankers pushing for further fiscal help also weigh on the market’s mood. As a result, the risk barometers Wall Street and US 10-year Treasury yields stayed on the back foot the previous day while S&P 500 Futures print mild gains near 3,485 by the time of the press.

Looking forward, China’s September month Consumer Price Index (CPI) and Producer Price Index (PPI), up for publishing at 01:30 GMT, will be the near-term key data to watch. While the headlines CPI is expected to ease from 2.4% YoY to 1.8%, PPI may recover from -2.0% to -1.8% during the stated month.

Although mixed China data may keep gold bears happy, risk updates can offer surprises if US diplomats manage to tackle any stimulus deal, which in turn can boost the yellow metal prices.

Technical analysis

An ascending trend line from September 28 offers immediate support to gold prices near $1,893 while another one from the April 01, near $1,877 now, can challenge the bears afterward. On the contrary, a two-month-long resistance line around $1,934 challenges the bulls.

Additional important levels

Overview
Today last price 1899.37
Today Daily Change 8.10
Today Daily Change % 0.43%
Today daily open 1891.27
 
Trends
Daily SMA20 1902.22
Daily SMA50 1935.85
Daily SMA100 1866.11
Daily SMA200 1747.88
 
Levels
Previous Daily High 1925.48
Previous Daily Low 1886.58
Previous Weekly High 1930.62
Previous Weekly Low 1873.01
Previous Monthly High 1992.42
Previous Monthly Low 1848.82
Daily Fibonacci 38.2% 1901.44
Daily Fibonacci 61.8% 1910.62
Daily Pivot Point S1 1876.74
Daily Pivot Point S2 1862.21
Daily Pivot Point S3 1837.84
Daily Pivot Point R1 1915.64
Daily Pivot Point R2 1940.01
Daily Pivot Point R3 1954.54

 

 

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