XAU / USD cuts losses and approaches $ 1,900

• Gold cuts weekly losses and returns to $ 1,885.
• The precious metal rebounds amid moderate dollar weakness.
• A clear victory for Biden could open the doors to the recovery of gold.

Gold futures They have recovered from lows of $ 1,860, returning to the $ 1,885 zone, driven by a slightly brighter market environment on Friday that has eased the demand for safe haven from the US dollar.

Gold depreciates due to a cautious market

The yellow metal, however, remains negative on the week, on the way to a 1.1% depreciation. Market concerns about the impact of a second wave of COVID 19 and uncertainty over the US elections have strengthened the US dollar, to the detriment of dollar-denominated commodities such as gold, which fell to just above levels. multi-month lows at $ 1,850.

A short hedging round on the last trading day of the month could explain the moderate pullback in the US dollar, which has helped the bullion move some distance from recent lows. Beyond that, falling US Treasury yields have helped ease demand for the USD, providing further support for the recovery in gold.

A Democratic win could clear the bullish path for XAU / USD

Next week’s US elections are expected to set the near-term path for gold futures, says FXStreet analyst Yohay Elam, who sees the XAU / USD appreciation should Biden win a clear win: “The Gold depends largely on the results of the elections, for the White House and the Senate. Opinion polls point to a useful victory for Biden over Trump. However, Trump may not necessarily accept the outcome and that could cause chaos that would drag markets down and gold with it. However, even assuming Biden wins, the higher path for gold would be clearer with a blue wave, which would change the Senate. ”