Gold price consolidates today after yesterday’s sharp move higher as the precious metal continues to find support at the 50-day moving average. The rising fears of no-deal Brexit support the gold price as the rhetoric from the two sides gets more problematic after the UK Internal Markets Bill. All eyes are in the Brexit talks today after EU threatens legal action against the UK if it does not provide reassurance that the UK will not break the Brexit withdrawal agreement.
Gold price also gets a hand from the correction in USD after the three days rebound, as the US Dollar index (DXY) yesterday dropped to 93.05. The shift to the monetary policy framework from the Fed in August has pushed the USD lower across the board.
ECB Decision To Trigger Volatility in Gold
Gold traders await today the ECB decision which might trigger high volatility. Euro represents about 58% of the USD index, and any significant move in the common currency would have a massive impact on DXY and in gold. Analysts expect that ECB will keep rates unchanged but might signal a 0.10% interest rate cut by the end of 2020 which would be bearish for the Euro and also for gold.
Gold Price Daily Technical Analysis
Gold price is 0.05% higher at 1,947, in a wait and see stance ahead of the ECB decision. Gold price consolidating between 1,900 and 1,950 the last six trading sessions, looking for a fresh catalyst.
Resistance for the precious metal stands at 1,950 the high of the consolidation range. Next supply zone stands at 1,975 the high from September 2. More sellers would be met at 1,993 the top from September 1.
On the contrary, support for gold price is at 1,942 today’s low. The next critical support stands at 1,915 the 50-day moving average. A break below might trigger more selling pressure towards 1,866 the low from August 12.
Gold Price Daily Chart