Daily Brief, Sept 29 – Everything You Need to Know About Gold Today!
Arslan Butt • 2 min read
Good morning traders,
Prices for the precious metal, GOLD, closed at 1,881.19, after placing a high of 1,882.95 and a low of 1,848.88. Overall, the movement of gold remained bullish throughout the day. On Monday, gold prices rose on the back of the weak US dollar, ahead of the US presidential debates this week. However, the gains in gold were limited on the first day of the week, due to a rebound in the stock market.
The US Dollar Index fell by 0.4%, from the two-month peak that it achieved last week. The US Dollar gained almost 1.8% last week, and gold and other commodities came under pressure because of the strength of the dollar. However, the decline in the US dollar, ahead of the US presidential debates this week, raised the commodities prices on Monday.
President Donald Trump and former Vice President Joe Biden will face each other on Tuesday in their first presidential debate. This debate will be the first of three debates between the candidates. Biden and Trump will meet again in Miami on Oct 15 and in Nashville on Oct 22 for the next rounds of debates. The topics of the debates include both candidates’ records, the Supreme Court, the ongoing coronavirus pandemic, the US economy, racism and violence in the cities, along with the integrity of the election.
US President Donald Trump has raised many questions over the last topic of debate, and he has even refused to commit to a peaceful transfer of power in case of his defeat. This is something new, as no former President has ever done this before. As these election shenanigans helped the gold prices, other risk-supporting activities limited the gains in the precious metal on Monday.
Figures released last week showed that industrial firms in China had made profits for the fourth straight month in August, and this raised hopes for a quick economic recovery. The risk sentiment was boosted by this news, and it supported the equities, keeping the yellow metal gains in check.
Other news that kept the risk sentiment supported, is that scientists are working on a nasal spray that could prevent infection with the coronavirus. Researchers have revealed that promising results have already been seen in ferrets. These developments also kept the gold gains limited on Monday.
Moreover, the rising number of coronavirus cases throughout the world, especially in Europe, along with the uncertainties surrounding the Brexit, supported the rise in gold prices on Monday. The chances for a no-deal between the EU and Great Britain are increasing day by day, weighing on the market sentiment. Meanwhile, the tensions between the US and China have also escalated over the origins of the coronavirus, the South China Sea and the technology disputes. These uncertainties supported the safe-haven appeal, resulting in the yellow metal heading upwards on Monday, in the absence of any data being released.
Daily Technical Levels
Pivot Point: 1,865.60
The precious metal, GOLD, is trading at the 1,882 level, and it has formed a bearish engulfing candle on the hourly timeframe. The overbought metal is likely to trade with a bearish bias, to complete a 38.2% Fibonacci retracement level. On the lower side, gold may find support at 1,876, with the resistance becoming the support area. Simultaneously, a bearish breakout at the 1,876 level could lead gold prices towards the 1,872 level. A bearish bias dominates today. Good luck!