- Gold was seen oscillating in a range through the early European session on Wednesday.
- A modest bounce in the US equity futures undermined the metal’s safe-haven demand.
- Sustained USD buying interest also collaborated to cap the dollar-denominated commodity.
Gold lacked any firm directional bias and remained confined in a narrow trading band, around the $1930 region through the early European session.
Having found a decent support near the $1906 region, around 50-day SMA, the precious staged a goodish bounce on Tuesday from two-week lows and finally settled nearly unchanged for the day. The recovery was triggered by the global flight to safety amid a major selloff in the US equity markets.
Against the backdrop of the ever-increasing coronavirus cases and doubts over the sustainability of the US economic recovery, AstraZeneca delayed testing of a coronavirus vaccine weighed on investors' sentiment. This, in turn, boosted demand for traditional safe-haven assets, including gold.
The global risk sentiment further took hit on the back of increased risk of a no-deal Brexit. The market worries resurfaced after the UK Prime Minister Boris Johnson threatened to walk away from Brexit talks if a deal is not reached by mid-October.
However, a modest bounce in the US equity futures kept a lid on any further gains for the metal. Adding to this, sustained US dollar buying interest further collaborated towards capping the upside for the dollar-denominated commodity and led to a subdued/range-bound price action on Wednesday.
From a technical perspective, Tuesday's downfall confirmed a near-term breakdown below a symmetrical triangle. That said, the lack of follow-through selling below the 50-day SMA warrants some caution for bearish traders and positioning for any further near-term depreciating move.
On the other hand, bulls might still need to wait for a sustained strength beyond the $1940-45 supply zone in order to confirm that the commodity might have formed a strong base and placing fresh bets.
Technical levels to watch
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.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
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.