XAU / USD reversal extends to $ 1,900

• Gold cuts past gains and loses $ 30 to test $ 1,900 area
• Risk aversion fuels the dollar as hopes for US stimulus fade
• XAU / USD is testing the bottom of a triangle formation, at $ 1,895

Gold’s bullish attempt seen on Wednesday has been short-lived as the precious metal failed to extend gains above $ 1,930. He XAU / USD it trimmed gains on Thursday, with demand for the US dollar rebounding amid bitter market sentiment and upbeat US macro figures.

XAU / USD sinks as market sentiment deteriorates

Gold prices have fallen nearly $ 30 so far Thursday amid more negative risk sentiment. Hopes for a fiscal stimulus deal in the US have been crushed by comments from US President Trump accusing Democrats on Twitter of being unwilling to do “what is right for our great American workers, or for our wonderful USA. ” This has sparked a race for safety that has propelled the US dollar.

In addition, on the macro front, better-than-expected weekly US jobless claims, which fell to 787,000 versus market expectations of 860,000, have helped strengthen the US dollar to the detriment of gold futures.

Gold testing the bottom of a triangle formation

The daily chart shows XAU / USD testing the lower line of a symmetrical triangle, now around $ 1,890. Down here, the bulls could take over and push gold towards $ 1,875 (100-day SMA) and late-September lows at $ 1,848 before hitting multi-month lows.

On the upside, the pair should break above $ 1,925 / 30 (50-day SMA and the top of the triangle) to regain bullish momentum and extend towards $ 1,975 (Sept. 16 high) and $ 1,995 (Sept. 1 high) .

Daily chart