XAU / USD remains vulnerable near $ 1,890 level amid resurgent USD demand

• A sharp pickup in demand for the US dollar triggers new sales in gold on Wednesday.
• The political uncertainty in the United States forces investors to hedge their positions and benefits the USD.

The gold It has seen fresh selling at the start of the European session on Wednesday and could now head towards the lower end of its daily trading range. Nowadays Around the $ 1,890 region, strong demand around the US dollar has been seen as one of the key factors putting some pressure on gold prices, denominated in dollars. The first results of the US elections indicated that the race for the White House has turned out to be much closer than expected.

Since investors had bet on a clear win for Democratic candidate Joe Biden, the result has forced investors to hedge their positions and fueled some aggressive money flows into the USD. Furthermore, the news has indicated that there will be a delay in the results of key states on the battlefield, such as Wisconsin, Michigan and Pennsylvania.

Meanwhile, the latest comments from the presidcurrent body, Donald Trump, have raised the possibility of a contested election and they have unleashed a new global wave of risk aversion. This has been evident by a sharp drop in US equity markets, which coupled with a drop in US Treasury yields. offers some support to the yellow metal.

Having said that, a period of greater uncertainty could continue to prop up the dollar. This, in turn, should limit any significant positive movement for the XAU / USD and could lead to further selling at higher levels. Therefore, a drop towards the recent daily closing lows, around the $ 1,860 region, remains a possibility.