Gold Price Analysis: XAU/USD stays depressed above $1,900

Gold picks up bids near $1,930 during the early Tuesday morning in Asia. The yellow metal dropped for the last two days in a row while closing around $1,923/24 on Monday. Although buyers are trying to retake controls, the quote remains inside the previous day’s trading range between $1,924 and $1,934.

Bears’ return or consolidation?

While lower high since early August, followed by the latest weakness in the yellow metal’s prices, favor gold bears, a short-term triangle formation established since August 07 keeps the buyers hopeful. Not only the technical pattern but fundamentals are also probing the sellers’ entry.

Among them, the prevalence of the coronavirus (COVID-19) and the Sino-American tussle grab major attention. Even if the US government’s efforts to fast-track the pandemic’s cure recently favored the risk-tone sentiment, the rest of the top three virus-hit economies, namely India and Brazil, are still jostling with the first wave of the spread.

On the other hand, TikTok’s latest suit over the Trump administration’s ban, claiming lack of fair chance to defend itself, joins India’s phasing out of Huawei equipment to cite the Sino-American tension. Additionally, the global markets’ cautious sentiment ahead of this week’s key Jackson Hole Symposium also favors the risk-aversion and may help the commodity prices.

Though nothing from the farther could disappoint risk-takers on Monday as S&P 500 and Nasdaq refreshed record highs while the US 10-year Treasury yields also rose 1.4 basis points to 0.654% by the end of North American session. While offering extra burden on the quote, the US dollar index (DXY) rose past-93.00 to 93.30 the previous day.

Moving on, gold traders may witness a dull day in Asia amid a lack of major data/events. Though, the latest chatter over India’s moves and US Secretary of State Mike Pompeo’s stand on Israel may offer small moves.

Technical analysis

With the 21-day SMA joining the resistance line of a short-term triangle around $1,971/72, buyers are likely to have a tough nut to crack while aiming the north. Alternatively, a downside break of $1,924, comprising the triangle’s support, can take rest on a 50-day SMA level near $1,871 before challenging the monthly low around $1,863.