Gold (XAU/USD) extended its declines into the second straight day on Thursday. The yellow metal fell to fresh monthly lows of $1860 before recovering some ground to settle the day near $1868. On Friday, gold bulls are attempting a bounce but the bright metal is not out of the woods ye as COVID-19 fears and US election anxiety are set to keep the US dollar in favor, FXStreet’s Dhwani Mehta reports.
“Gold is attempting a tepid bounce, as the US dollar bulls take a breather after the solid upsurge. With the US reporting record 91K new virus infections and tighter restrictions in the EU, the risk-off flows could intensify going forward and revive the haven bids for the greenback. Therefore, the risks remain skewed to the downside for gold, as the metal is on track for the worst week in over a month.”
“Gold gave a daily closing below the critical 100-day moving average (DMA), now at $1890, for the second day in a row, convincing investors that the path of least resistance is to the downside.”
“The 14-day Relative Strength Index (RSI) sees an upturn but remains below the midline, within the bearish region, adding credence to the bearish outlook. Therefore, the next stop for the bears is seen at $1849, the September month low. Acceptance below the latter could trigger a fresh sell-off towards the support at $1791.”
“Recapturing the 100-DMA barrier of $1890 on a daily closing basis is critical to easing off the selling pressure in the near-term.”