Looking at the widely traded and popular spot gold futures contract (XAU/USD) and above daily MT 4 chart, the spot contract is on the defensive thanks to a broadly stronger U.S. dollar. The dollar has gained strength on coronavirus worries as well as political uncertainty over the U.S. elections.
The spot gold contract has come off last week’s high price point at $1,900 per ounce to challenge the downside barrier that lines up at $1,850 per ounce.
Risk sentiment is switched off as traders are watching coronavirus (Covid-19) news out of the United States as well ongoing political uncertainty over the U.S. elections. The United States has just surpassed 250,000 coronavirus (Covid-19) deaths as the resurgent coronavirus continues to spread throughout the country taxing hospital systems.
Traders are also watching the ongoing legal fight that the Donald Trump election campaign is aging. President Trump’s path to any sort of victory has all but vanished.
His legal team has lost key legal challenges over the vote count in Pennsylvania, Michigan and other key states. However President Trump refuses to concede and continues to attack the very fabric of the American democracy as he calls the election rigged and fake.
This is supporting the safe have U.S dollar (USD) which is sending the spot gold futures contract lower. A strong greenback makes buying, holding and insuring the yellow metal more expensive for those trading in other currencies.
Daily Spot Gold Technical Analysis
As mentioned above, for now the XAU/USD contact, on the above daily price chart is still above $1,850 per ounce. A daily close below this layer of support opens the door to challenge the mid-July low price point at $1,795 per ounce.
The Next lay of technical support comes into play at $1,760 per ounce.
On the upside, a daily close above $1,900 per ounce opens the door to the key upside barrier in play at $1,910 per ounce. This is where the fifty and one hundred (50, 100) day simple moving averages meet.
The next upside barrier then lines up at $1,960 per ounce with the 1 September high price at $1,995 coming into play.