Gold price digest yesterday’s rebound from two-month lows. The precious metal lost almost 7% of its value during September. The USD rebound from two-year lows was the main factor for the correction in the gold price. Yesterday the greenback retreated from two-month highs and gold price managed to gain over 1%. Investors focus on the talks in Washington about a new relief package. Democratic lawmakers are preparing a 2.2 trillion package according to Nancy Pelosi.
Loose monetary policy from the Fed and excess liquidity pushed the US dollar to two-year lows and helped all dollar-denominated assets to rally the last months. The first debate between Joe Biden and Donald Trump will attract investors attention later on the day and might create volatility in the USD.
The correction in gold price tested the 100-day moving average and managed to rebound as expected, and I have discussed in my previous gold analysis article: Gold Price: Bulls Bet on a Rebound From The 100-Day SMA.
Gold Price Short Term Outlook
Gold price is 0.09% lower today at 1,879 digesting yesterday’s gains. The short term picture for gold is neutral. Gold price found strong support at the 100-day moving average the previous week. Slipping below that support would increase the potential for a sharp correction towards 1,803 the low from July 20.
On the upside, today’s high at 1,887 is the initial resistance. We could see more sellers at 1,905 the top from September 23. A break above the 50-day SMA at 1,944 would indicate the beginning of a more sustained upward move.
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Gold Price Daily Chart
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