Gold Price Looks Weak As It Meets Tough Resistance

Summary:

Gold price at dynamic resistance and looks weak heading into the US elections. USD bulls may step in even ahead of the big event.

The inability of the gold price to break above dynamic resistance makes it look weak here. Similar price action we can see on the EURUSD pair, that mirrors the price action in gold by the pip.

With a little over one week until the U.S. elections, the ranges on gold remain tight. After it made a new all-time high this year when it broke above $2,000, gold price only consolidated. Recently it broke lower from what seems like a triangle that acted as a reversal pattern. Moreover, after the break, the bounce that followed retested the triangle’s lower edge and currently meets resistance.

In fact, the price of gold reflects what the market is doing for a few months now. It waits for the U.S. elections to pass.

However, it is not only about the U.S. elections outcome. The day following the vote, the Fed delivers its monetary policy in what seems to be one of the most important decisions of the year.

Goldman Sees Higher Commodity Prices In 2021

Goldman Sachs recently published its view about the commodity prices in 2020 and sees higher inflation. As a result, higher gold prices are normal in the view of one of the most respected investment banks in the world.

The return of inflation is on everybody’s lips, and it all depends on the size of the new fiscal stimulus package and what the next four years at the White House will bring.

Gold Price At Resistance

So far this week, the price of gold traded with a bid. So did the EURUSD, that broke higher from the moment the Monday trading started.

But as the EURUSD pair stalled at 1.1880, the price of gold meets similar resistance. It is not clear and is irrelevant what pair leads the other. What is relevant is that the gold price meets dynamic resistance, and bears may want to short at market with a stop loss at $1,991 and target a move below $1,700. For such a trade, bears should consider a timeframe beyond the 2020 U.S. elections.