Gold Price Analysis: XAU/USD wavers around $1,950 with eyes on Georgia election results
- Gold seesaws near fresh two-month high marked on Tuesday, picks up bids above $1,950 off-late.
- Risk dwindles amid US-China tussle, Georgia election results awaited.
- China Caixin Services PMI, virus updates also becomes important to watch.
Gold prices attack the upper end of the $1,947-53 trading range, currently near $1,951, during the initial Asian trading on Wednesday. The yellow metal jumped to the fresh high since November 09 the previous day as the US dollar refreshed multi-month low and risks improved. However, cautious sentiment ahead of Georgia’s election results, coupled with the Sino-American tension, recently challenged the commodity buyers.
Cautious optimism prevails…
Although the early exit polls for Georgian election results keep Republicans ahead of the Democrats, global market players trust Joe Biden and the company’s ability to offer heavy stimulus with the Senate power. Also on the positive side could be the coronavirus (COVID-19) vaccine news that battles the virus strain and lockdown updates. Having heard over 95% success rate for leading covid vaccines from the US Food and Drug Administration (FDA), recent news that millions of medicines are on the way to the UK favor the risks off-late.
Read: Georgia Elections Preview: Markets geared for a special moment, three scenarios
Alternatively, the US-China tussles escalate with US President Donald Trump signing an executive order to stop business with eight Chinese applications. Earlier in the day, the New York Post conveyed the news of China’s blocking the COVID-19 origin’s investigations. On the same line, Bloomberg said the New York Stock Exchange is reconsidering its decision to halt the delisting of three major Chinese telecommunications firms.
Amid these plays, S&P 500 Futures drop 0.16% by press time despite Wall Street’s upbeat performance.
Moving on, gold trades will keep eyes on Georgia election results, buyers will cheer Democratic victory, while virus updates and Sino-American news can offer extra directives. It should be noted that the US ADP Employment Change, expected 88K versus 307K prior, as well as the FOMC minutes, will also be important to watch. It should additinaly be noted that Chinas' Caixin Services PMI, expected to recede to 51 from 57.5, will also offer extra directives to gold prices.
Technical analysis
November’s high near $1,966 lures gold buyers unless witnessing a downside break below October 2020 top surrounding $1,933.
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.
