Gold Price Analysis: XAU/USD wobbles above $1,950 as pre-Fed caution sneaks in


  • Gold prices consolidate pullback from two-week high with the latest bounce off $1,948.
  • Risk barometers flash mildly positive signals amid vaccine hopes, US-China tussle.
  • WTO terms American sanctions on Beijing as a violation of international rules, Brexit jitters continue.
  • Global economics have been mostly positive, US dollar snaps two-day losing streak.

Gold keeps Tuesday’s pullback from the early-September high while taking rounds to $1,954/55 during the initial hours of Wednesday’s Asian session. The yellow metal earlier cheered the improved market sentiment but stepped back on the US dollar strength. Also weighing on the bullion could be the cautious mood of traders ahead of the Federal Open Market Committee (FOMC) meeting.

Nothing matters more than the Fed…

The gradual recoveries in the global economics from China and the US mostly healed traders’ disappointment from the coronavirus (COVID-19) woes during Tuesday. While China’s Industrial Production and Retail Sales beat forecasts for August, the US NY Empire State Manufacturing Index also rallied to 17.00 and pleased the optimists.

The positive signs from the economic frontier joined news from the University Of Pittsburgh School Of Medicine where scientists developed the strongest antibody component to the pandemic, tested over animals.

Further, the Sino-American trade area flashed mixed signals as China extended tariff relief for the US imports and America rolled back the decision to ban some of the productions from Xinjiang. Though, the mood turned sour after the World Trade Organization (WTO) ruled against the Trump administration’s decision to levy multiple trade sanctions on Beijing. Not only trade but fears concerning Brexit and the wider outbreak of the COVID-19 also played its role during the later part of the previous day.

However, traders remain positive as upbeat data from China and the US suggest a little urgency for the Fed to act, which in turn raises hopes of a bullish statement from the American central bank.

Against this backdrop, Wall Street managed to close in green whereas the US 10-year Treasury yields gained 1.2 basis points (bps) to 0.68%.

Moving on, New Zealand’s Current Account and the Pre-Election Economic and Fiscal Update (PREFU) will precede Japan’s trade numbers and Aussie housing data to entertain Asian market players. Though, major attention will be given to the key risk catalysts like trade headlines, virus updates and Brexit news. All in all, traders may portray the typical pre-Fed inactivity ahead of the key event.

Read: September FOMC Preview: Projections, projections, projections

Technical analysis

Failures to cross a one-month-old falling trend line, currently around $1,967, drag gold to a one-week-old support line near $1,951. Also likely to challenge the metal sellers could be 21-day and 50-day SMA levels near $1,944 and $1,929 respectively. Meanwhile, the monthly top close to $1,992, followed by the $2,000 threshold can lure the bulls beyond $1,967.

Additional important levels

Overview
Today last price 1954.23
Today Daily Change -2.57
Today Daily Change % -0.13%
Today daily open 1956.8
 
Trends
Daily SMA20 1945.93
Daily SMA50 1923.08
Daily SMA100 1826.49
Daily SMA200 1705.03
 
Levels
Previous Daily High 1962.6
Previous Daily Low 1937.1
Previous Weekly High 1966.54
Previous Weekly Low 1906.62
Previous Monthly High 2075.32
Previous Monthly Low 1863.24
Daily Fibonacci 38.2% 1952.86
Daily Fibonacci 61.8% 1946.84
Daily Pivot Point S1 1941.73
Daily Pivot Point S2 1926.67
Daily Pivot Point S3 1916.23
Daily Pivot Point R1 1967.23
Daily Pivot Point R2 1977.67
Daily Pivot Point R3 1992.73

 

 

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