- Risk aversion boosts the US dollar and hits gold which falls below the 20-day moving average.
- Wall Street falls amid concerns about a resurgence in coronavirus cases.
The gold it is falling sharply and is down nearly two percent, even after cutting losses. XAU / USD fell to $ 1,868 / oz reaching the lowest level since the end of September. At time of writing, it is trading at $ 1,880 below lows as risk aversion wanes in financial markets.
The Dow Jones lost 2.45% and the Nasdaq 2.70%. In Europe, the DAX fell 4.10% and the CACA 40 3.45%. The surge in coronavirus cases prompts officials across Europe to consider lockdown measures that should weigh on the economy.
Risk aversion did not trigger demand for gold. Even lower US yields did not support the metal that suffered like most assets.
From a technical perspective, the recent drop leaves the XAU / USD vulnerable to further losses. A consolidation below $ 1,870 would expose the next support seen in September of $ 1,850. On the upside, a recovery above $ 1,900 would ease the downward pressure. Only a rally above $ 1,930 (downtrend line) would change the bias to bullish.
Credits: Forex Street
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