- Summary:
- Gold price action on the XAUUSD chart is trending lower today, but the support at 1800 continues to hold firm, preventing sellers from taking the day.
Gold price finds itself back under pressure this Friday, after the Thanksgiving Holiday of yesterday. Three investment banks (CIBC, TDS Securities, and ANZ) acknowledged the short-term outlook for the XAUUSD pair, which remains bearish according to prevailing market sentiment. However, they also provided a pathway that could see gold prices topping $2,000 in 2021, given the chance of rates staying very low for a long time in the United States.
Economists at Capital Economics also support an elongated low-interest environment outlook. According to their research, the speculative hopes that coronavirus vaccines would provide a fast exit route for central banks towards policy tightening or a pause in loosening are misplaced. The group expects further loosening of monetary policy in the US and the EU, as lockdowns keep businesses locked and put jobs at risk.
For gold traders, this is a pointer as to what to expect with price action. Optimism may have come from the coronavirus vaccine announcements, but the vaccines are not a magic bullet to bring jobs back. Even the WHO is expressing cautious optimism about the vaccines.
Furthermore, the conclusion of the US elections enters the decisive stage in December. If we are to go back to 2000, where we have some legal precedent, the middle of December could prove an exciting period for the markets.
Gold price is trading at 1806.60 at the time of writing.
Technical Outlook for Gold Price
Today’s resumed downside move continues to locate support at 1800.34, which has been the price support the entire week. This price area also has the 200-day moving average providing dynamic support. Bears will only get more joy if the 1800 psychological support gives way. This will open the door for a possible move towards 1788.90, with 1762.51 and 1748.40 (26 June low) also lining up as potential downside targets.
Bulls will be hoping for the price to bounce from current levels, targeting 1821.55 and 1850.78 in the short term. Further targets to the north include 1869.39(28 October low) as well as 1900.76 and 1918.68
XAUUSD Daily Chart
