Gold price (XAUUSD) has fallen by nearly $20 after President Donald Trump appeared to talk up a possible trade deal with China.
“One of the great things about the China Deal is the fact that, for various reasons, we do not have to go through the very long and politically complex Congressional Approval Process. When the deal is fully negotiated, I sign it myself on behalf of our Country. Fast and Clean!”
These words of President Donald Trump encapsulate the mood of the markets, which have been in full risk-on mode since yesterday evening. Risk-on sentiment is also being driven by hopes that a soft-Brexit may come to pass after all, causing an exit from safe-haven assets. This perception has caused investors to dump gold, which is enduring immense bearish pressure on the day.
XAUUSD is currently trading at 1.480.36, after hitting off 10-day lows at $1,474 (S2 pivot on the charts and low of October 2). This move is erasing nearly $15 on the day.
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XAUUSD Outlook for the Rest of the Day
XAUUSD was able to touch the S2 pivot support for the day at 1474. A break below this level introduces a new support target at 1458.07 (lows of August 7 and October 1). This is also an area where price had previous found resistance on July 19.
On the flip side, failure to break 1,474 temporarily halts the slide, but keeps the S1 pivot price of 1,484 as the price cap. Only a breach of this cap to the upside will allow price to target the previous support-turned resistance level at 1,490 (red line).