The fate of gold (XAU/USD) hinges on the much-awaited outcome of the US Presidential election, which will determine the extent of the fiscal stimulus aid, as the country battles an intensifying second wave of the coronavirus.
A sweeping Blue-wave victory could likely be the best bet for the gold buyers. However. a contested outcome would reinforce the bearish momentum in the yellow metal. Therefore, a sense of caution will likely prevail in the markets in the lead up to the US election, underpinning the safe-haven dollar while keeping the upside attempts limited in gold. How is gold positioned technically?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the yellow metal could face an immediate hurdle at $1888 on its road to recovery, which is the confluence of the SMA100 one-hour and Fibonacci 38.2% one-month.
Subsequently, recapturing the powerful barrier at $ 1891 is critical for the recovery to gain traction. At the level, the SMA100 one-day, previous day high and pivot point one-day R1 intersect.
The next upside target awaits at $1900, the convergence of SMA200 four-hour and Bollinger Band one-day Middle. Meanwhile, the Fibonacci 61.8% one-month at $1906 is the level to beat for the XAU bulls.
Alternatively, acceptance below the confluence of the Fibonacci 38.2% one-week and one-day at $1880 is needed to unleashing additional downside in the spot.
Sellers will then target $1877 support, where the Fibonacci 23.6% one-month lies. A failure to resist above the last could trigger a fresh drop towards the strong cushion at $1861, the previous week and month low.
Here is how it looks on the tool
About Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD recovers from two-year lows, stays below 1.0450
EUR/USD recovers modestly and trades above 1.0400 after setting a two-year low below 1.0350 following the disappointing PMI data from Germany and the Eurozone on Friday. Market focus shifts to November PMI data releases from the US.
GBP/USD falls to six-month lows below 1.2550, eyes on US PMI
GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2550 on Friday. Disappointing PMI data from the UK weigh on Pound Sterling as investors await US PMI data releases.
Gold price refreshes two-week high, looks to build on momentum beyond $2,700 mark
Gold price hits a fresh two-week top during the first half of the European session on Friday, with bulls now looking to build on the momentum further beyond the $2,700 mark. This marks the fifth successive day of a positive move and is fueled by the global flight to safety amid persistent geopolitical tensions stemming from the intensifying Russia-Ukraine war.
S&P Global PMIs set to signal US economy continued to expand in November
The S&P Global preliminary PMIs for November are likely to show little variation from the October final readings. Markets are undecided on whether the Federal Reserve will lower the policy rate again in December.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.