Gold Price Analysis: XAU/USD bulls flirt with weekly top around $2,000

• Gold recovers losses from $2,015.65 to $1,976.10, staying past-$2,000 off-late.
• US dollar index (DXY) drops to the lowest since May 2018, S&P 500 Futures fail to keep the intraday record rise.
• American President Trump reiterates dislike for China, House Speaker Nancy Pelosi hints breaking stimulus deadlock.
• Europe becomes the latest victim of virus wave 2.0.
• The light calendar in Asia keeps risk catalysts in the driver’s seat.

Gold prices keep the previous day’s recovery moves from $1,976 while taking rounds to $2,002/03 amid the initial Asian session trading. The yellow metal refreshed the one-week high on Tuesday following the US dollar index slump to May 2018 low. Though, follow-on consolidation dragged the pair to sub-$2,000 area before regaining the threshold by the end of North American session.

Bulls keep the baton…

Be it the greenback’s weakness or strengthening of the coronavirus (COVID-19) resurgence, not to forget the Sino-American tussle, everything drives market players to gold.

The DXY’s fall to the lowest in 26 months also joins the S&P 500’s intraday record rise and US 10-year Treasury yields’ declines to please the yellow metal buyers.

Risk catalysts remain mixed as the recovery in the US housing market and American House Speaker Nancy Pelosi’s hit of breaking the stimulus deadlock follow the receding virus figures from Pacific nations to portray the receding challenges. However, rising pandemic data from Germany and France favor the odds of fresh lockdowns in Europe’s biggest economies. Also questioning the risk-tone sentiment is the US-China tussle that keeps firming as President Trump said he postponed talks with China and doesn’t want any negotiations for now.

Although a major chunk of the recent risk factors suggest a mild recovery in the market sentiment going forward, threats are lurking behind the bars and hence keep the safe-haven demand intact.

Technical analysis

Multiple lows marked during the first full week of August between $2,015 and $2,020 challenge the bullion’s immediate upside ahead of the record top near 2,075. Meanwhile, 10-day SMA near $1,984 and $1,940 may entertain short-term sellers before highlighting the recent trough close to $1,863.