Gold Price Analysis: XAU/USD’s potential short-term reprieve if USD pulls back
Gold prices have deteriorated in the US dollar’s relentless comeback as investors move away from stocks. The price of the dollar is correlated to gold, so it stands to reason that if the dollar is about to tail off its gains, then gold should find reprieve.
The following is a top-down analysis of where the price is anticipated to travel between resistance and support structures, offering further opportunities to the downside. The opportunities will arise if the US dollar breaks higher on the monthly and daily charts as illustrated below.
Stimulus doubts grow, Gold down on dollar’s rise
Gold is tanking as the dollar rallies for a fourth consecutive day. Gold remains on the ropes as the prospects of fresh monetary or fiscal stimulus is not imminent and as the virus situation in both Europe and the US continues to deteriorate.
Gold is getting beat up as many investors run to the sidelines after the breach of some key technical levels. The unwinding of bearish dollar bets continues but this is unlikely the beginning of a new trend.