Gold: $1963 is the level to beat for the bulls

Gold (XAU/USD) trades in the $1950 area, similar to the Friday’s close, as the yellow metal draws bids from broad-based US dollar weakness and the downbeat market mood. Coronavirus updates and Fed Chair Powell’s speech are eyed on Monday, FXStreet’s Dhwani Mehta reports.

Key quotes

“The sentiment remains sour amid resurgent coronavirus fears, especially after the UK is considering nationwide lockdown while Greece and Denmark announced new restrictions on Friday. Investors seek safety in gold, as they fear the fresh measures to contain the virus resurgence could temper the nascent global economic recovery. Meanwhile, the US dollar remains on the back foot, despite the risk-aversion, as the overhang over the US fiscal impasse combined with growing election risks continues to weigh.”

“The negative tone in the US equity futures points to a weak start on Wall Street, which could bode well for the bright metal. The focus also remains on the speech by the US Federal Reserve (Fed) Chairman Jerome Powell due later on Monday at 14:00 GMT. Any hints on the Fed’s future monetary policy path will have a significant bearing on the dollar-denominated gold.”

“A break above the 100-HMA hurdle at $1955, the price could see a fresh uptick towards the rising channel trendline resistance at $1963.11. Only a sustained break above the latter could open doors towards the last week’s high of $1973.64.”

“Should the bulls face rejection at the $1963.11 barrier, the price could fall back towards the 100-HMA. Further down, sellers will aim for the 200-HMA at $1949.75 if the 21-HMA resistance-turned-support gives way. Steeper declines cannot be ruled, as the bears would regain control below a break of the $1940 level.”