- A strong pickup in the USD demand exerted fresh pressure on the dollar-denominated commodity.
- A selloff in the equity markets might lend some support to the safe-haven gold and help limit losses.
- Bearish traders might wait for a sustained break below 100-day SMA before placing aggressive bets.
Gold edged lower during the first half of the European trading session and was last seen trading near daily lows, just above the $1900 level.
The precious metal witnessed some fresh selling on Wednesday and reversed the previous day's positive move, albeit remained well within a four-day-old trading range. A strong pickup in the US dollar demand was seen as a key factor exerting some pressure on the dollar-denominated commodity.
The alarming pace of growth in new coronavirus cases and the imposition of fresh lockdown restrictions fueled concerns that the economic growth will weaken again. This, along with the uncertainty about the actual outcome of the US election, forced investors to unwind their USD bearish bets.
Apart from this, the lack of progress in the US stimulus talks further dampened the market mood. This was evident from a steep decline in the equity markets. The anti-risk flow did little to revive the precious metal's safe-haven demand, albeit could possibly help limit any deeper losses.
Moreover, growing wariness about the US presidential election might further help limit any large movements and extend some support to the XAU/USD. This makes it prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move.
From a technical perspective, any meaningful slide below the $1900 mark is more likely to attract some buying near 100-day SMA. The latter is currently pegged near the $1886-85 region, which if broken decisively will be seen as a fresh trigger for bearish traders and prompt some technical selling.
There isn't any major market-moving economic data due for release on Wednesday. Hence, the broader market risk sentiment, developments surrounding the coronavirus saga, along with the USD price dynamics will be looked upon to grab some short-term trading opportunities.
Technical levels to watch
|Today last price||1901.38|
|Today Daily Change||-6.42|
|Today Daily Change %||-0.34|
|Today daily open||1907.8|
|Previous Daily High||1911.46|
|Previous Daily Low||1897.92|
|Previous Weekly High||1931.54|
|Previous Weekly Low||1894.48|
|Previous Monthly High||1992.42|
|Previous Monthly Low||1848.82|
|Daily Fibonacci 38.2%||1906.29|
|Daily Fibonacci 61.8%||1903.09|
|Daily Pivot Point S1||1899.99|
|Daily Pivot Point S2||1892.19|
|Daily Pivot Point S3||1886.45|
|Daily Pivot Point R1||1913.53|
|Daily Pivot Point R2||1919.27|
|Daily Pivot Point R3||1927.07|
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