- Gold’s decline resumes amid upbeat market mood, USD bounce.
- Solid Chinese data, US stimulus hopes lift the risk sentiment.
- Bears target 100-DMA at $1847 as gold remains vulnerable.
Following a steady start to a new week in Asia, Gold (XAU/USD) is seeing a bit of selling in early Asia, as the bears look to test the two-month lows of $1849.
The spot closed last week below the August month low of $1863, triggering an alarm for the XAU bulls. The yellow metal remains at the mercy of the US dollar dynamics amid plenty of economic and political risks looming, in the face of the coronavirus resurgence.
At the time of writing, gold trades at $1857, reversing a brief dip from daily lows of $1856. The US dollar bulls appear to have regained control following Friday’s pull back from two-month lows.
The greenback extended the retreat in Asia, courtesy of the risk-on mood triggered by the optimism on the Chinese economic recovery, especially after the world’s second-biggest economy reported a rise in the industrial profits for the fourth straight month.
Additionally, expectations that the US fiscal stimulus talks could likely restart this week also dull the dollar’s attractiveness as a safe-haven. Markets also reposition themselves heading into the first US Presidential election debate and critical Non-Farm Payrolls release.
Gold: Technical outlook
Gold’s hourly chart shows that it wavers within a pennant so far this Monday, challenging the critical barrier at $1863 on the road to recovery. That level is the confluence of the 21 and 50-hourly Simple Moving Averages (HMA). To the downside, the two-month lows of $1949 will be threatened, below which the powerful 100-day Simple Moving Average (DMA) at $1847 will be on the sellers’ radar. All in all, the path of least resistance is to the downside.
Gold Additional levels
