Gold (XAU/USD finished Tuesday with modest gains, having return to its recent trading range around $1930 after the wild swings. So far this Wednesday, gold extends its range play around $1930, divided between concerns over the vaccine and a broadly bid US dollar. The yellow metal awaits a range breakout, as the focus shifts to the ECB decision, FXStreet’s Dhwani Mehta briefs.
Key quotes
“Pharma company AstraZeneca announced a halt in its vaccine trials over safety concerns, which dashed hopes of a swift recovery from the pandemic and weighed soured the risk sentiment. The omnipresent US-China tensions, this time over the US plans to ban cotton products, and US fiscal deadlock also aggravated the risk-off mood. Meanwhile, mounting no-deal Brexit fears and dovish expectations from the ECB monetary policy decision, due on Thursday, also keep the gold traders on the edge.”
“Over the past month, the price has remained trapped between the 21-day Simple Moving Average (DMA) to the upside while the 50-DMA cushions the downside. Therefore, investors await a strong catalyst to dive out of the range in either direction.”
“A daily closing below the rising trendline support at $1925 will confirm the triangle pattern and open floors for a test of the $1900 mark. The next downside cap is seen at $1863 (August 12 low). Alternatively, recapturing the 21-DMA at $1946 on a daily closing basis is critical to negate the ongoing bearish bias.”
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