XAU / USD shows signs of weakness and tests $ 1870

• The precious metal is trading negative after finding resistance at $ 1885.
• Short-term bias points to the downside, it is testing support at $ 1870.

He gold shows a bearish bias in the preview of the American session. The price rose in Asian hours to $ 1884 and then changed direction, falling to $ 1866, but it bounced back to the $ 1870/75 zone, where it is trading. Financial markets operate with limited routes on Tuesday favoring a downward trend in gold volatility, although yesterday’s movements suggest that there could be sharp changes ahead.

Monday gold It went from trading above $ 1900 to plummeting to levels close to $ 1850. Today it looks calmer, in part because stocks show very low volatility so far this day. The volume in the markets is reducing with a view to the end of the year festivities.

The operators are still attentive to what happens in the equity markets. The bags did not register significant variations on Tuesday. The news involves a rapprochement of positions in the time trial negotiations for Brexit, but still without an agreement in sight. In the US, the fiscal stimulus was approved and important data will be released in hours, including a new reading of GDP for the third quarter, data from the housing market and consumer confidence.

Rebound loses strength

The XAU / USD had fallen at the beginning of the month to $ 1750 after which it undertook a strong bounce that reached the peak on Monday above $ 1900 and where the 100-day moving average is passing. This is an indication of possible movement exhaustion. Between $ 1850 and $ 1860 there is a support band that to give way would expose the 20 SMA at $ 1840 and then the stronger support at $ 1820.

A return above $ 1900 would put gold back on a bullish bias and back on track to the key $ 1970 level. The latter, if left behind, could trigger an upward acceleration.

Technical levels