Daily Market Recap - GOLD Snaps Back

Gold is trading sharply lower on Thursday as hope fades over a covid-19 US fiscal stimulus deal being achieved before the November 3rd presidential elections. Upbeat macroeconomic data helped apply further pressure on buying demand, with the precious metal falling by over one percent in intraday trading.

After reaching a two-week high yesterday, gold prices have been met with strong selling after a resurgence in speculative bets against stimulus measures in the near term. Dips should be contained however as most analysts still agree that a package should be agreed upon no later than the end of November after the US elections.

On the economic calendar, the US released strong employment figures with the continuing jobless claims for October coming in below expectations at 8.3M. The initial jobless claims also fell short of the consensus at 787k vs 860k, increasing optimism over the recovery ongoing in the US. Should economic data continue to be too positive, the stimulus may be delayed, in turn decreasing upside potential in gold.

From a technical perspective, the main trend in gold remains up albeit the short-term momentum is edging in favor of the bears. The likely scenario for the precious metal will be further consolidation around the 1,900 marks, within the 1,915 and 1,880 range.

(Chart Source: Tradingview 22.10.2020)

The 20 days EMA will serve as the immediate support level to watch for, a break below may fuel a further drop towards the 1,880. Should bulls manage to hang on above the 1,900 marks, the uptrend will likely be preserved for in the coming session.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.