Gold Price Analysis: XAU/USD wavers around $1,800 amid risk reset
Gold prices seesaw around $1,802, following its failure to extend the pullback from $1,800.62 beyond $1,804.26, amid the initial Asian session on Tuesday. While the bears are firming up the grip to defy Monday’s rejection of earlier declines since Thursday, bulls refrain from leaving unless $1,800 holds.
The latest headlines portray risk recovery amid the receding coronavirus (COVID-19) numbers from the US and mixed news concerning the Sino-American tension. While the CNBC relied on the top US health official to convey the early arrival of the pandemic’s cure, Bloomberg cited American diplomats dropping the idea of undermining the Hong Kong dollar peg to punish Beijing. However, US Secretary of State Mike Pompeo’s comments defying China’s claim over the South China Sea and Reuters update signaling further hardships for the listings of the Asian major’s equities on the US floor question the risk-on mood.
Gold Price Analysis: XAU/USD just dipped below $1800
XAU/USD had been positive earlier in the session but there has been a turnaround in risk sentiment and stocks and gold has sold off during the late hours of the US session. The DXY has also recovered somewhat and is now trades at 96.51 after being as low as 96.27, 10-year treasury yields have also fallen and it seems like there is a flight to fixed income.
Looking at the chart below, there is a clear channel formation but it is very steep. The first support will be the USD 1800 per troy ounce level but beyond that, the channel low could be next up. Any break of the channel low could take the price to the next support near USD 1787.13 per ounce.
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