Good morning traders,
Prices for the precious metal, gold, closed at 1,902.16, after placing a high of 1,908.64, and a low of 1,891.33. The gold prices failed to provide any significant move on Monday, and remained flat throughout the day.
The gold prices remained almost flat on the day, surging initially in the earlier trading hours and then declining in the late trading hours on Monday. The rise in the prices for the precious metal was caused by a meltdown in stocks a week before the US election, and the rise in daily new coronavirus infections all over the world raised the safe-haven demand.
On the other hand, the decline in gold prices in the late trading sessions on Monday was caused by the firmer dollar and stalled progress in talks for a new US coronavirus aid package.Gold prices moved to the upside, despite the firmer dollar on Monday, and it was the second time in two weeks that the yellow metal and the dollar moved in the same direction. The last time gold moved in the same direction as the US dollar was on October 16, when both were down by about 0.2% on the day.
The rising number of coronavirus cases and the anxiety over the pandemic, along with the growing expectations for a “blue wave”, caused gold to remain higher, despite a stronger US dollar on the day. The expected victory of Democratic Party candidate Joe Biden, is referred to as the blue wave, as opposed to the red or Republican Party president Donald Trump, in the upcoming US Presidential elections.
Furthermore, at 19:00 GMT, the New Home Sales figures from the US for September showed a drop to 959K, against the projected 1,025K and the previous 994K. The disappointing New Homes Sales data from the US on Monday weighed on the US dollar and helped gold prices to remain on the positive side.
On the other hand, the decline in gold prices was caused by the stalled progress in the negotiations for a new US coronavirus aid package. The US House Speaker Nancy Pelosi said on Sunday that the Trump administration was reviewing the latest plan for more coronavirus relief, and she expected a response on Monday. But as the presidential elections were approaching fast, it is assumed that a blue wave could help gold rally on a potential large stimulus package, especially as the number of coronavirus cases is rising in the US and all over the world.
On Monday, France reported a record increase in infections, and Spain announced a state of emergency, as cases surged through Europe over the weekend. Following the mixed sentiments, gold remained consolidated and flat throughout the day and failed to provide any significant movement on Monday.
Daily Technical Levels
Pivot Point: 1,899.80The precious metal, gold, has violated the double top resistance level at 1,904, and the closing of the candle above this level may drive further upward movement in the market. On the higher side, gold may face the next resistance in the 1,912 area, and higher up, the XAU/USD could also lead the price towards 1,920. Conversely, the bearish breakout at 1,905 could send the gold price even lower, towards the 1,900 and 1,896 levels. Good luck!