During the Asian trading session on Friday, gold is trying to recover from another day of strong downward push. Recently the price fell to the lowest level for the last month of trading.
The main factor of pressure on gold remains the US dollar, which is actively strengthening for the second day in a row. Gold and the dollar index have a very close inverse correlation. Gold is denominated via the US currency, therefore, its appreciation leads to a significant decrease in demand for gold and other raw materials.
The demand for the American currency is growing despite the US presidential elections, which will be officially held on November 3. Market uncertainty persists despite the fact that Joe Biden is ahead of Donald Trump according to nationwide polls. Everyone remembers the 2016 election, when Trump ultimately won the election despite polls predicting defeat.
Investor interest in the dollar is growing primarily due to the weakening of other major currencies. A new outbreak of coronavirus in Europe has significantly weakened the prospects for economic recovery in the region. The French authorities have already announced that they expect a new drop in GDP in the 4th quarter. The United States on Thursday reported the highest quarterly economic growth (+ 33.1%) since 1947, but the situation with coronavirus in the country remains difficult. 41 out of 50 states have a record number of COVID-19 cases every day, so the impact of the pandemic on the economy in the 4th quarter may increase.
The price went down from the flat of 1892.00-1930.00. This is a strong bearish signal within which one can expect a decline in quotations under 1850.00. As part of the correctional wave, buyers are still unable to cope with the local resistance at 1883.00. We expect the development of a new downward wave from this level.
The main scenario - a decline from current levels in the direction of 1853.00.
An alternative scenario - a breakdown of the local resistance at 1883.00 and growth to 1893.00.
The current fundamental outlook is moderately negative. We consider shorts from the level of 1883.00.
FortFS wishes all traders a Happy Chinese New Year! Only from February 8 to March 12, 2021, we reduce spreads for the 4 most popular trading pairs. New values*: EURUSDf: 0.8 GBPUSDf: 0.9 USDJPYf: 1.0 XAUUSDf: 3.5 *These values are valid only for FLEX accounts Hurry up to take advantage of the offer! Learn more about spreads: https://www.fortfs.com/clients/specifications
Only until February 26, special deposit rates* are available for all traders in Malaysia, Indonesia, Vietnam and Thailand: 3.6 MYR = 1 USD 10 000 IDR = 1 USD 20 000 VND = 1 USD 25 THB = 1 USD *Only Local bank deposit method is included Hurry up to take advantage of the offer until […]