Gold Price Analysis: XAU/USD drops back to the $1,900 area as US dollar strengthens

• Metals remain under pressure as the investors remain cautious.
• XAUD/USD holds onto recent losses, recover capped by $1,920.

Metals are falling on Tuesday for the second day in a row but so far, they have been able to hold above weekly lows. XAU/USD found resistance at $1,920/oz and pulled back to the $1,900 area.

XAU/USD is facing an increasing bearish intraday pressure as the US dollar gains momentum. The DXY is at two-month highs above 94.00 as the greenback resumes the rally across the board.

Equity prices in Wall Street are starting to turn lower. The Dow Jones is now negative, falling 0.55% while the S&P 500 drops 0.25%. The risk aversion environment continues to weigh on metals and keeps boosting the US dollar.

Economic data from the US (Existing Home Sales and Richmond Fed) was mostly ignored by market participants. Fed’s Chair Powell and Treasury Secretary Mnuchin are exposing at the House Financial Services Committee, regarding the response to the coronavirus pandemic.

Levels to watch

Currently, XAU/USD is hovering around $1,900. The immediate support is seen at $1,880 (Sept 21 low) followed by $1,860 (Aug low). A break of the last one would likely clear the way to more losses. On the upside, immediate resistance is located at $1,920 (Sept 22 high) and then at $1,935. A recovery above $1,960 would remove the negative bias.

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