- Gold witnessed some fresh selling at higher levels and has now drifted into the negative territory.
- A modest pickup in the USD demand, stability in the equity markets contributed to the pullback.
- The US political uncertainty and coronavirus jitters might help limit deeper losses, at least for now.
Gold dropped to fresh session lows in the last hour, with bears now looking to extend the downward trajectory further below the $1900 round-figure mark.
The precious metal failed to capitalize on its early uptick, instead met with some fresh supply near the $1910 region amid the emergence of some fresh buying around the US dollar. Growing market worries about the second wave of COVID-19 cases in Europe and the United States continued lending some support to the greenback's status as the global reserve currency. This, in turn, was seen as a key factor exerting some pressure on the dollar-denominated commodity.
Apart from this, signs of stability in the equity markets, following the overnight selloff in the US equity markets, further undermined demand for the safe-haven precious metal. However, investors remain concerns about a further escalation in diplomatic tensions between the world's two largest economies. This, along with the uncertain US political situation, should benefit the XAU/USD and help limit any deeper losses, at least for the time being.
The US-China tensions mounted over a potential $2.4 billion sale of the US anti-ship missiles to Taiwan. China reacted to the news by slapping sanctions on US companies. Separately, China's Foreign Ministry was out with a statement, uring the US to withdraw Taiwan arms sales plan and stop both arms sales and military contact with Taiwan.
Meanwhile, the market might have already started pricing in a strong Democratic victory at the upcoming US election on November 3. However, the increased uncertainty about the actual outcome might continue to drive some haven flows and lend some support to the XAU/USD. This makes it prudent to wait for some strong follow-through selling before traders start positioning for an extension of the recent pullback from the $1931-33 supply zone.
Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data. This, along with the broader market risk sentiment and developments surrounding the coronavirus saga, might influence the USD price dynamics and produce some meaningful trading opportunities around gold.
Technical levels to watch
|Today last price||1899.94|
|Today Daily Change||-2.11|
|Today Daily Change %||-0.11|
|Today daily open||1902.05|
|Previous Daily High||1908.66|
|Previous Daily Low||1891.32|
|Previous Weekly High||1931.54|
|Previous Weekly Low||1894.48|
|Previous Monthly High||1992.42|
|Previous Monthly Low||1848.82|
|Daily Fibonacci 38.2%||1902.04|
|Daily Fibonacci 61.8%||1897.94|
|Daily Pivot Point S1||1892.69|
|Daily Pivot Point S2||1883.34|
|Daily Pivot Point S3||1875.35|
|Daily Pivot Point R1||1910.03|
|Daily Pivot Point R2||1918.02|
|Daily Pivot Point R3||1927.37|
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