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Gold is under pressure once again

Gold on Wednesday traded with a slight decline, despite the negative dynamics of the major indexes and increased investor interest in risky assets.

 

The main reference point for gold is USD, which is still holding its positions in the market, despite the release of disappointing retail sales data on Tuesday.

 

In recent weeks, gold has not behaved as a defensive asset and reacted poorly to the dynamics of the stock market. This suggests that inverters are now looking for protection in other assets. The reason for this is most likely the political uncertainty in the United States. Everyone is waiting for the denouement of the acute political struggle, which, apparently, will come in January next year. On January 5, the results of the second round of elections to the Senate in Georgia will be announced, and then it will be clear whether the Democrats will be able to get a majority of the Senate seats. In this case, Biden will be able to carry out a large-scale program of measures to stimulate the economy. This program can become a strong driver for the growth of the value of gold.

 

In the economic calendar, investors today will again follow the publication of macroeconomic data from the United States to assess the impact of the second wave of the virus on the economy. Later, the data on issued building permits for October will be published. The indicator is expected to grow from 1.545 million to 1.560 million.

 

Bulls yesterday could not keep the price above the level of 1884.00. This is a negative signal for gold. Above the level of 1884.00, a very strong resistance area has now formed from which the price can resume its downward movement. Today we expect a decline to 1867.00.

 

  • Resistance levels: 1890.00, 1900.00, 1915.00.

 

  • Support levels: 1867.00, 1853.00, 1840.00.

 

The main scenario is an increase to 1890.00 and a fall to 1867.00.

 

An alternative scenario is a decline to 1867.00 from the current levels.

 

The current fundamental outlook is moderately negative. We consider shorts in the range of 1884.00-1890.00.

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