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Gold declines to 2-month lows

Gold remains under strong pressure due to the USD dynamics.

 

The USD rise to almost 2-month highs sharply limited the demand for gold and other commodity assets, which are becoming more expensive for foreign investors. As a result, gold could set a new 2-month low today.

 

The US dollar continues to be supported by macroeconomic statistics from the US, as well as the dynamics of the movement of its main competitors (euro, pound and yen).

On Tuesday it became known that in August, sales in the secondary housing market reached 6 million. This is the highest figure in the last 14 years. Investors also reacted positively to the adoption by the House of Representatives of the bill on financing the government until December 11.

 

The main competitors of the dollar are declining due to the growing threat of the beginning of the second wave of the pandemic. The UK and several European countries have tightened quarantine measures. Investors are revising forecasts for the recovery of the European economy for the worse.

 

The local market lacks strong support factors for gold, so today the decline may continue.

 

In the economic calendar today it is worth paying attention to the publication of preliminary data on PMI of the manufacturing and service sectors in the US and the EU. It is also worth paying attention to the speech of the head of the Federal Reserve, Jerome Powell.

 

A downward wave continues to develop on the chart. The price is now testing the level of 1875.00. A breakdown of this mark can be expected with a high probability. We are expecting a decline to 1853.00.

 

  • Resistance levels: 1921.00, 1937.00, 1967.00.

 

  • Support levels: 1875.00, 1853.00, 1793.00.

 

The main scenario - a breakdown of support at 1875.00 and a decline to 1853.00.

 

An alternative scenario - growth from the current levels to 1921.00.

 

The current fundamental outlook is moderately negative. We consider shorts in the range of 1890.00-1905.00.

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