Gold Price Analysis: XAU/USD approaches one-month highs at $1,933
- Gold rallies 0.8%on the day to approach October's top at $1933
- XAU/USD appreciates on dollar weakness amid hopes of a US stimulus deal
Gold futures have posted their best daily performance in two weeks, appreciating about $20 on Wednesday, favoured by broad-based dollar weakness to reach session highs at $1,930, only a few dollars shy of October’s top, $1,933.
Gold appreciates on US dollar weakness
Bullion appreciated on Wednesday to break beyond the last five days' trading range as hopes of a stimulus deal in the US boosted market sentiment, sending the US dollar lower across the board. Comments by House Secretary Nancy Pelosi who showed her optimism about reaching a deal before the elections were echoed by President Trump who affirmed that he is willing to accept a large stimulus bill.
Trump’s comments suggest that he will approve the $2.2 trillion aid package pushed by the democrats, which has triggered a sell-off in US bonds, ultimately contributing to US dollar weakness. The US Dollar Index las lost 0.4% to complete a four-day decline and hit seven-week lows.
On the technical front, XAU/USD is pushing against resistance area at $1,925/35 (50-day SMA / October 12 high). Above here, the precious metal might set its focus towards $1,975 (September 16 high) and $1,992 (September 1 high). On the downside, immediate support lies at $1,875 (100-day SMA) and below here, $1,850 (September 26 low) and mid-July lows at $1,792.
Technical levels to watch