Gold falls to new daily lows below $ 1,900 level

• Gold is witnessing new sales at higher levels and is now moving into negative territory.
• A modest pickup in USD demand and stable equity markets contribute to the pullback.
• Political uncertainty in the United States and nervousness over the coronavirus could help limit deeper losses, at least for now.

The gold has returned initial gains to the $ 1,910 region and has fallen to fresh daily lows at the start of the European session, with the bears now looking to extend the bearish move below the round level of $ 1,900.

The precious metal has not been able to capitalize on its initial rise and found new sales near the region of $ 1,910 amid the emergence of new purchases around the US dollar. Growing market concerns about the second wave of COVID-19 cases in Europe and the United States have offered some support for the US dollar as a global reserve currency.. This, in turn, has been considered a key factor that has put some pressure on gold prices, denominated in dollars.

Apart of this, the signs of stability in the stock markets, after the sell-off the day before in the US markets, have further weighed on the demand for the precious metal. However, investors remain concerned about further escalation of diplomatic tensions between the world’s two largest economies. This, coupled with the uncertain political situation in the US, should benefit XAU / USD and help limit the deepest losses, at least for the moment.

Tensions between the United States and China have increased for a possible sale of $ 2.4 billion of US anti-ship missiles to Taiwan. China has reacted to the news by imposing sanctions on American companies. On the other hand, the Ministry of Foreign Affairs of China has issued a statement urging the United States to withdraw the plan to sell arms to Taiwan and stop both arms sales and military contact with the country.

Meanwhile, the market may already have begun pricing a broad Democratic victory in the upcoming November 3 US election. However, Greater uncertainty about the actual outcome could continue to drive some safe haven cash flows and lend some support to the XAU / USD. This makes it prudent to wait for a strong continuation sell before investors begin to position themselves for an extension of the recent pullback from the $ 1,931-33 resistance zone.

Market participants are now awaiting the US economic calendar, which highlights the publication of durable goods orders. This, coupled with broader market risk sentiment and developments around the coronavirus saga, could influence USD price dynamics and generate some significant trading opportunities around gold.