Gold Price Analysis: XAU/USD attempting to bounce up from one-month lows at $1860
- Gold recovery attempt from $1,860, capped below 1.875
- XAU/USD remains weak with the USD coming up.
- US dollar rallies ion COVID-19 fears and US elections uncertainty.
Gold futures are attempting to bounce up after having depreciated more than 2% over the last two days. The yellow metal has picked up after hitting one-month lows at $1,860 although the upside moves are finding sellers at the $1,875 region.
Gold dives with the US dollar rallying
XAU/USD’s bearish reversal from mid-October highs above $1,930 accelerated on Wednesday after breaking below the bottom of the last week's trading rage, at $1,890 area.
Gold prices have suffered amid the broad-based dollar strength. The combination of market concerns about the impact of the second COVID-19 wave, with Europe introducing new lockdowns and the uncertainty regarding the US elections less than a week ahead of the election day, has strengthened the safe-haven dollar against its main peers.
On the macroeconomic front, US data has offered some additional support for the dollar today. According to the advanced estimations, US Gross Domestic Product expanded at a 33.1% annual pace in the third quarter, which is its best performance since records are taken in 1947 and the Weekly Jobless Claims decreased beyond expectations.
In Europe, the European Central Bank hinted to further monetary stimulus in December, which sent the euro tumbling, for the benefit of an already strong USD. All in all, the US Dollar index shows a 0.6% advance on the day after having reached levels beyond 94.00 for the first time in October.
Technical levels to watch