Good morning traders,

Welcome back to another exciting week. It’s probably going to be a busy day, as the US and Fed officials are likely to drive price action in the market. Prices for the precious metal, gold, closed at 1,898.68, after placing a high of 1,913.92, and a low of 1,897.74. Overall, the movement of gold remained bearish throughout the day.

After placing gains for two consecutive days, the gold prices posted a loss on Friday, due to the strength of the US dollar in the market. The greenback was strong across the board after US President Donald Trump reignited hopes that the US stimulus package would be approved before the November 3 elections.

Gold ended its week with losses, when fresh hopes regarding the US stimulus package were shot down by the Senate Majority Leader, Mitch McConnell. On Friday, US President Donald Trump said that he would agree to go higher than the $ 1.8 trillion offered by the White House for the coronavirus stimulus package, in order to strike a deal. In response, McConnell said that he wanted to put forward a highly targeted proposal of $ 500 billion, despite the failure of the previous skinny bill. The mixed comments by the Republicans raised the possibility that the US stimulus package would not be delivered soon, which lent support to the US dollar and weighed on gold prices.

On the data front, at 17:30 GMT, the Core Retail Sales figures for September showed a rise to 1.5%, against the projected 0.4%, supporting the US dollar. The Retail Sales for September also increased to 1.9% against the expected 0.7%, boosting the greenback and ultimately putting further pressure on yellow metal prices.

At 19:00 GMT, the Prelim UoM Consumer Sentiment figures for October were released, indicating an advance to 81.2 points, against the prediction of 80.2, which supported the US dollar and weighed on gold prices. The Business Inventories in August remained flat, at the expected 0.3%. The Prelim UoM Inflation Expectations for October rose to 2.7%, from 2.6% in September. At 23:00 GMT, the Federal Budget Balance figures were released, showing a deficit of -124.6B, against the projected -123.3B.

Most of the data, including the highlighted Retail Sales data from the United States on Friday, strengthened the US dollar. The US Dollar Index remained steady on Friday; however, the greenback posted weekly gains for the first time in the past three weeks. The strength of the US dollar proved negative for gold prices on the day. Furthermore, the hopes of a vaccine for the coronavirus dimmed after the UK Vaccine Taskforce Chairman, Kate Bingham, warned that it was unlikely that the vaccine could protect everyone from infection. She also added that ongoing re-vaccination would be needed, in order to reduce the severity of symptoms.

These vaccine-related fears supported the decline in gold prices on Friday. On the coronavirus front, the US recorded a record high number of new coronavirus infections – 68,000, since July. The blame was given to US President Donald Trump, who held a rally in Wisconsin,  despite warnings about public gatherings. The rising number of people infected with the coronavirus increased fears regarding the economic recovery in the US, and weighed on the US dollar, limiting the losses in the yellow metal.

Daily Technical Levels

Support             Resistance

1,898.76             1,916.36

1,891.13              1,926.33

1,881.16              1,933.96

Pivot Point:      1,908.73

The precious metal, gold, is trading sideways with a neutral bias, maintaining a narrow range of 1,910 to 1,903. A bearish breakout at the 1,903 level could lead the gold price towards 1,897 and 1,889. At the same time, a bullish breakout at the 1,910 level could drive further buying until 1,918. Good luck!