Gold Price Analysis: XAU/USD stays offered below $1,950 amid risk reset

1 month ago 21
43 CBD Solutions
Gold prices begin the week on a back foot while printing a three-day losing streak. Oxford University-backed vaccine trials to resume in UK, China retaliates US sanctions. UK’s deal with Japan adds barriers to Brexit negotiations, US policymakers still jostle over the aid package. Risk headlines to remain as the key amid a light calendar.

Gold carries the downbeat performance since Thursday while taking rounds to $1,940 amid the initial Asian session on Monday. The yellow metal remains pressured as the US dollar refrains from entertaining the bears and the risk catalysts flash mixed signals.

S&P 500 Futures kick-starts the week on a positive side…

Even if fears of no-deal Brexit joins the Sino-American tussle to weigh on the market sentiment, weekend news suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials, after halting it during the last week, seems to favor the risk barometer. Also on the positive side could be comments from the European Central Bank (ECB) policymakers suggesting further easy money days.

On the other hand, the World Health Organization (WHO) marked a record single-day increase in COVID-19 cases by 307,930 in 24 hours during this weekend. Also, China’s retaliation to the US sanctions on diplomats and the looming decision on TikTok keep the world’s two largest economies at loggerheads. Furthermore, the UK’s discount to Japan for a trade deal may disappoint Brussels and is likely to have a negative impact during this week’s Brexit talks.

It should also be noted that the US Consumer Price Index (CPI) data flashed another positive signal, after the Producer Price Index (PPI), for the Federal Reserve policymakers who are to meet this week. Additionally, optimism that Libya’s oil industry will reopen after almost eight months of a halt to exports added to the market’s positive sentiment.

Against this backdrop, S&P 500 Futures add 0.73% to 3,347 by the press time. Given the risk-barometers’ positive performance, the market’s safe-haven demand declines and the same weigh on gold prices.

Looking forward, a light calendar at the week’s start may keep traders directed towards the risk headlines. Among them, Brexit, virus and China are the keywords to search for.

Technical analysis

Repeated failures to cross 21-day SMA, currently around $1,945, joins bearish MACD signals to again challenge the 50-day SMA level of $1,925.

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