- XAU / USD falls to four-month lows towards $ 1,830.
- Gold accelerates its downtrend amid broad USD strength.
- XAU / USD: Confirmation below $ 1,850 could add to the downward pressure.
Gold futures they finally broke the $ 1,850 support on Monday, falling to fresh four-month lows at $ 1,830 amid a vastly stronger US dollar. The XAU / USD has managed to find buyers at the aforementioned $ 1,830, although it was down 1.6% on the day.
Gold suffers amid broad USD strength
The yellow metal has accelerated its downtrend from last week’s highs at $ 1,900 amid positive market sentiment following news of the AstraZeneca vaccine and a stronger US dollar, fueled by upbeat US macro figures.
Pharmaceutical giant AstraZeneca raised investor optimism on Monday, reporting that its COVID-19 vaccine, developed in conjunction with the University of Oxford, is 90% effective. This is the third vaccine to report promising test results, fueling hopes that the cure for the pandemic that is devastating the world economy will be available in the coming months.
In the US, Markit’s preliminary survey of the manufacturing PMI has shown a larger-than-expected expansion in private sector activity, helping to increase demand for the US dollar. Both the manufacturing and services sectors have released figures well beyond expectations, revealing that US economic activity has been resilient to the impact of COVID-19.
XAU / USD: Failing to break above $ 1,850 adds downward pressure
From a technical standpoint, a confirmation below $ 1,850 (late-September lows) could attract bears to push the pair lower. On the downside, below the intraday low of $ 1,830, the next areas of interest would be $ 1,795 (mid-July lows) and $ 1,760, the 50% Fibonacci retracement of the March-July rally.
On the upside, the pair should rally $ 1,850 to ignore the downside pressure and target $ 1,900 and $ 1,910 at the psychological level of the 100-day SMA. Once above, the next target would be $ 1,960 / 75 (Nov 9, Sept 16 highs).
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
