Gold Price Analysis: XAU/USD picks up bids above $1,920 amid mixed signals

• Gold refrained from extending the previous day’s losses from three-week top.
• China’s dislike of US arms push to Taiwan, COVID-19 updates and American President Trump’s health recovery recently gained market attention.
• Wall Street cheered tech-rally, ignored fears of further US stimulus stalemate.
• Trade data from China, US CPI and American traders’ reaction to the latest catalysts will be the key.

Gold prices regain upside momentum while rising to the intraday high of $1,924.52 during the early Tuesday’s Asian session. The yellow metal snapped a three-day winning streak the previous day as markets react to the increased odds of a delay in the US coronavirus (COVID-19) stimulus. Also offering the background music to the gold’s moves were China’s actions to tame the yuan strength and the COVID-19 woes. However, fresh challenges to the Sino-American relations and anticipated worsening of the US virus conditions battle American President Donald Trump’s negative status for the deadly virus, after four days of infection, to favor the bullion’s latest recovery.

Trade war, virus woes are back in focus…

Not only China’s rejection of the Aussie coals but its dislike for the US proposal to the Congress about selling three sales of advanced weaponry to Taiwan recently renewed the trade war saga. On the other hand, US National Institute of Allergy and Infectious Diseases (NIH) Director, Dr. Anthony Fauci, warned CNN’s Jake Tapper that the latest data on a rising number of the coronavirus (COVID-19) cases and projections of more deaths "jolt" the American public into reality. Typhoon in Hong Kong and the UK’s calls for the requirement of more stringent COVID-19 restrictions acted as additional market catalysts.

Elsewhere, the White House physician Sean Conley said on Monday that Trump tested negative for the coronavirus (COVID-19) for consecutive days.

Against this backdrop, S&P 500 Futures struggles for a clear direction near 3,532 even as Wall Street managed to cheer tech-shares run-up on Monday.

In doing so, the risk-takers seem to recollect the fact that the US House Speaker Nancy Pelosi, backed by the opposition Democratic Party, rejected President Trump’s $1.8 trillion COVID-19 aid package. Also, the lack of a major stimulus from Europe, amid persistent push for more fiscal help by the respective central bankers, acts as an extra burden on the risk sentiment.

Looking forward, gold traders may concentrate the recently highlighted challenges to the market’s mood to benefit from safe-haven demand unless the US traders return from the long weekend and react to September month’s Consumer Price Index (CPI). Though, this won’t nullify the importance of China’s September month trade numbers and any surprise updates on the much-awaited fiscal help from America.

Technical analysis

Bullish MACD keeps gold buyers directed towards breaking the 50-day SMA level near $1,937 unless the quote slips below the previous resistance line stretched from August 07, at $1,904 now.