Good morning traders,

 GOLD prices closed at 1,929.20, after placing a high of 2,006.40 and a low of 1,924.64. Overall, the movement of gold prices remained bearish throughout the day. The precious metal dropped more than 3% on Wednesday when the dollar jumped after the release of the minutes of the US Federal Reserve’s July meeting, which showed gains in the US Treasury yields. The minutes revealed that policymakers expressed little support with regard to capping bond yields.

Capping the bond yields could lessen the attractiveness of US treasury debt, putting pressure on the US dollar, and boosting the allure of the non-yielding metal.

The 10-year US Treasury Note was up by 0.9% after the release of the Fed minutes. However, on Wednesday, the US Dollar Index jumped about 1%, to above 93.

The minutes also reiterated that the economic downturn triggered by the coronavirus pandemic faces a highly uncertain path, and additional fiscal stimulus is needed to support the economy. Widespread stimulus measures and a low-interest-rate environment pushed gold prices to an all-time high level in the previous week, but after that, some correction was also seen in gold prices.

On Wednesday, a senior Trump administration official said that a smaller coronavirus relief bill, to the tune of about $ 500 billion, could be approved, as opposed to a package of between $ 1 trillion and $ 3 trillion, as was previously expected, since Congress had been unable to reach any agreement.

The hopes about a coronavirus relief bill – even a smaller one – gave the US dollar prices a push, as it was unexpected, and the stronger US dollar then pulled the gold prices down, causing them to lose the previous two-day gains on Wednesday.

On the other hand, White House Chief of Staff Mark Meadows said on Wednesday that there were no new high-level trade talks scheduled between the US and China; however, the two sides were in touch about the implementation of the Phase 1 trade deal.

Meanwhile, US President Donald Trump also told reporters, during his visit to Yuma, that he had postponed the review of a trade agreement with China on August 15, as he was frustrated over Beijing’s handling of the coronavirus pandemic.

At first, it was considered that the delay in the review was due to scheduling differences, and the US wanting to give China more time to increase its purchases; however, Trump revealed on Wednesday that he had canceled the talks with China, as he was angry with Beijing. This raised concerns of further escalation in the US-China disputes, and weighed on the market sentiment, capping additional losses in the gold prices on Wednesday.

Daily Technical Levels

Support Resistance

1,905.46 1,989.96

1,875.73 2,044.73

1,820.96 2,074.46

Pivot point: 1,960.23

Gold is trading with a bearish bias at 1,951, but it recently violated the upward trendline resistance level of 1,962. Closing of candles below this level could drive selling bias in the market. Overall, gold has completed a 38.2% Fibonacci retracement at the 1,952 level, and above this, the next resistance level remains at 1,968, which is extended by the 61.8% Fibonacci level. Gold may find support at levels of 1,939 and 1,923. Good luck!