- A modest pickup in the USD demand prompted some selling around gold on Thursday.
- The risk-off mood underpinned the safe-haven XAU/USD and helped limit deeper losses.
Gold traded with a mild negative bias through the early European session, albeit has managed to trim a part of its daily losses to the $1911-10 region.
The precious metal witnessed some selling on Thursday and eroded a part of the previous day’s positive move to levels just above the $1930 level, or seven-day tops. A modest pickup in the US dollar demand was seen as one of the key factors exerting some pressure on the dollar-denominated commodity. However, a fresh leg down in the equity markets helped limit any deeper losses.
The greenback was back in demand amid fading hopes for a pre-election US stimulus package, especially after the US President Donald Trump accused Democrats of being unwilling to craft an acceptable compromise on stimulus. Moreover, investors remained sceptic that any fiscal measures can pass through the Congress amid strong opposition from within Trump’s own Republican Party.
Meanwhile, the slow pace of US stimulus talks took its toll on the global risk sentiment. This, coupled with the US political uncertainty ahead of the November 3 presidential election, drove some heaven flows and helped limit any deeper losses for the XAU/USD. The incumbent President Trump and his Democratic rival, Joe Biden will meet for the final presidential debate later this Thursday.
In the meantime, traders will look forward to the release of the US Initial Weekly Jobless Claims for some impetus. This, along with the USD price dynamics and developments surrounding the US fiscal stimulus, might produce some meaningful trading opportunities during the North American session.
Technical levels to watch
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