Gold Price Trades Lower But Downside Below $1890 Remains Limited
Gold prices are lower on the day after renewed fears that there would be no stimulus on the table before the US Nov 3 elections. Hopes of a stimulus plan suffered a blow yesterday after US Treasury Secretary Steven Mnuchin indicated that it would be difficult to get a stimulus plan agreed on before the elections.
CNBC has just interviewed Mnuchin, and while he reiterated this position, there has been some damage control. This is why gold prices are down but the downside remains limited. Here are excerpts from Mnuchin’s interview on CNBC a few minutes ago as monitored by LiveSquawk:
“Will Be Hard To Get Done Before Election But Will Keep Trying”
“President Trump Determined To Work On Larger Stimulus Deal”
“Will Fundamentally Agree With Democrats’ Testing Language”
“Will Continue To Negotiate Until A Deal Is Done”
In essence, Mnuchin has left a door open to a deal by saying that Republicans could accept some of the demands of House Democrats to get a deal through. Gold price is presently trading at 1895, heading into the New York session.
Technical Outlook for Gold Price
Price action on the XAUUSD daily chart remains within an ascending channel. Downside action on gold price is therefore limited by the channel’s lower edge. This limit keeps prices above the 1890 price level, well above the 1869.39 support. However, a breakdown of the channel’s trendline brings this support firmly within view, with 1821.55 also lining up as potential future support.
Price recovery from present levels takes gold price above 1900.76, targeting 1918.68 and potentially, 1940.15. Resolution of the stimulus situation will continue to be a key driver of price action on the XAUUSD charts going forward.